Weekend Argus (Saturday Edition)
September vehicle exports rose by 11%
THE August manufacturing and mining data will dominate the data calendar next week, but the SA Chamber of Commerce and Industry ( Sacci) Trade Activity Index (TAI) will also give a broader-based read of private sector economic activity in September.
August manufacturing production data will be released on Tuesday, while the mining production data and the TAI are due out on Thursday.
Another data point that is due to be released next week is the monthly ports data, but the timing of that is uncertain.
Although manufacturing production has contracted on a year-on-year (y/y) basis for the past four months, some economists believe the August data could buck the trend as September vehicle exports rose by 11% y/y to a record high, meaning that vehicle manufacturers had to ramp up production to meet overseas demand. In addition, the record maize harvest is busy being processed, so the food and beverage sector should also see higher y/y production.
Mining production on the other hand could disappoint due to base effects as August 2016 saw high production and that may not be met in August 2017. Bulk export volumes for August showed that volumes out of Saldanha, which are mostly iron ore, plunged by 22.3% y/y, so this may be reflected in the production data as well. There is currently a global oversupply of iron ore so the September bulk export data will be scrutinised to see if there was a recovery in iron ore exports. Iron ore accounts for nearly 15% of mining production so its fortunes have a major impact on mining production. South Africa’s bulk export volumes are released by Transnet National Ports Authority (TNPA). This is one of many non-Statistics South Africa data points that help flesh out what is happening with the economy.
Bulk export volumes fell by 7.2% y/y in August to 11.7 million tons (Mt) after surging by 34.55 y/y in July to 15.6 Mt. This brought the increase for the first eight months to This is a diffusion index similar to the Purchasing Manager’s Index (PMI) that was released last week.
Both the Absa PMI and the Standard Bank PMI were below 50, which is the neutral level, in September and it remains to be seen whether the SACCI TAI will follow suit.
The seasonally adjusted TAI has been on a recovery recently before easing in August from 51 in July, 49 in June, 47 in May and 45 in April. Despite the poor perceptions about weak economic growth, the sales volumes index rose to 55 in August from 54 in July, 55 in June, 52 in May and 44 in April, while the new orders index also improved and jumped to 49 in August from 43 in July, 46 in June, 49 in May and 40 in April.
Retailers cut back their inventory due to April’s low sales volume, but there was a recovery in July to 51 before easing to 46 in August. The input price index eased to 62 in August from 64 in July, 63 in June, 63 in May and 62 in April. The employment sub-index remained steady at 43 in August and July from 47 in June, 49 in May and 48 in April.