Numbers show how Eskom hurts SA
SA’s power cuts hurt the economy in the fourth quarter – and two data points yesterday showed just how bad it was.
Production by manufacturers fell 5.9% year-on-year in December – the most in five-and-a-half years. And for the first time in at least 11 years, the unemployment rate didn’t fall in the fourth quarter, unmoved at 29.1%.
Eskom, generator of about 95% of the nation’s electricity, implemented the widest blackouts yet in December to prevent the grid from collapsing. That weighed on business confidence, adding to the negative sentiment about the utility’s finances.
“We are now seeing how the
Eskom problems are starting to show up in the official data,” said Jacques Nel, an economist at NKC African Economics.
The unemployment rate stayed at the highest in at least a decade.
The trade and manufacturing sectors shed the most jobs in the fourth quarter, a period during which retailers often employ extra temporary staff for Christmas-related sales.
The jobless number is “a sign of how weak the economy is: business confidence is bad, consumer confidence is in negative territory and growth remains weak”, said Christie Viljoen, an economist at PwC.
The decline in trade jobs
“shouldn’t have been the case in the fourth quarter with Black Friday and Christmas. It shows that retailers were preparing for a disappointing festive season, which is concerning”.
Yesterday’s data won’t be the last to show the negative impact of the December outages. While retail sales probably grew, a Bloomberg survey shows it would have been slower than in November. And a report due tomorrow may show mining production dropped 3.5% in the last month of the year – the most since the previous December, according to the median estimate of five economists in a separate survey. – Bloomberg