Weekend Argus (Saturday Edition)
Non-Stats SA data will dominate information flow
NON- STATISTICS South Africa (Stats SA) data releases will dominate the calendar next week even though there are many Stats SA releases due as well.
The week starts off with the Stats SA data on May liquidations and April insolvencies. This data shows how much stress companies and individuals are under. The good news in the first quarter was that both liquidations and insolvencies showed year-on-year (y/y) declines and this should continue in Monday’s release.
On Tuesday we have the Quarterly Employment Statistics (QES) for the first quarter. The QES released by Stats SA for the fourth quarter 2017 showed a mixed picture, with the level of employment rising by 127 000. As the QES is a quarterly survey covering a sample of approximately 20 000 (VAT registered) private and public enterprises in the formal non-agricultural sector of the South African economy that provides payroll data on the number of people employed as well as wages, there is no provincial breakdown.
On Wednesday we have selected building statistics of the private sector, as reported by local government institutions for 2017. This release supplements the normal monthly series reported by large municipalities and has a wider coverage, but is only released once a year.
On Thursday we have the Stats SA data release on May producer inflation. Producer inflation rose to 4.4% y/y in April from 3.7% y/y in March and a similar level is expected for May. Intermediate goods prices edged up by 0.1% y/y in April after falling by 1.3% y/y in March.
Mining prices fell by 2.6% y/y in April after a 3.1% y/y decrease in March. Agricultural prices edged up by 0.4% y/y in April after rising by 3.9% y/y in March.
On Friday we will have the non-Stats SA data releases of May money supply, May government finances and May foreign trade balance.
Economists are expecting a rise in credit to boost money supply growth, but are hoping for a recovery in May from the large April fiscal deficit, while the foreign trade surplus is expected to widen.
Broad M3 money supply growth eased to 6.39% y/y in April from 6.42% y/y in March and 6.89% y/y in February, while narrow M0 money supply growth rose to 7.69% y/y from 7.62% y/y and 5.69% y/y.
Economic activity seems to be fuelled more by cash than credit as total loans and advances y/y change dipped to the lowest since 2009 in January at 3.82% y/y. It has subsequently recovered to 4.29% y/y in April from 4.52% y/y in March and 4.41% y/ y in February. In particular, household credit demand rose to 4.1% y/y in April from 3.9% y/y in March, while non-household, which is mostly corporate, eased to 4.5% y/y in April from 5.1% y/y in March.
Government revenue rose by 8.5% y/ y in April, but expenditure surged by 19.5% y/y, so the deficit ballooned by 42.2% y/y to R43.7 billion. The 7.1% y/y increase in the VAT rate to 15% from 14% had a minimal effect as domestic VAT collections rose by only 8.4% y/y. In the fiscal year ended March 2018, the fiscal deficit increased by 25% to R209.5bn, as revenue rose by only 5.0%, while expenditure increased by 7.6%. Revenue grew by just 5.6% in the 2016/17 fiscal year, while expenditure rose by only 4.8%.
The foreign trade surplus narrowed to R1.1bn in April from R9.3bn in March. The narrowing was due to a R9.6bn or 9.8% decline in exports to R88.5bn, while imports fell by R1.4bn or 1.6% to R87.4 billion.
In 2017, exports went up by 7.9%, while imports rose by only 0.7%, but this year the 57% jump in the international oil price has seen imports rise faster than exports.