Publications
Partners
Cape Town - The year is expected to end on a depressed note with subdued growth prospects for the last quarter of the year, according to the latest Bureau for Economic Research (BER) surveys.
"Growth is already projected to slow markedly in 2016Q3 after a strong showing in Q2 and the latest surveys do not suggest that a significant acceleration is on the cards for the final quarter of 2016," it said.
The RMB/BER Business Confidence Index (BCI) fell back by four points to 38 in the fourth quarter. This after improving to 42 index points in the third quarter.
This implies that over 60% of respondents are unsatisfied with present business conditions.
The index showed that confidence dropped back sharply in the motor and retail trade sectors, and declined marginally for wholesalers.
Sentiment among manufacturers remained unchanged at depressed levels, while the building and construction sector was the only sector that recorded an increase in confidence.
"The BER expects GDP growth to measure around 0.5% (quarter-on-quarter and annualised) in 2016Q3. The latest survey results point to a 'muddle-through' scenario where growth continued to move broadly sideways at a low rate in 2016Q4."
Meanwhile, the Barclays PMI result concurs with that of the BCI and points towards sluggish GDP growth in the final quarter of 2016.
The seasonally adjusted PMI reversed October’s loss and rose by 2.4 points to 48.3 index points in November. However, despite the uptick, November marked the fourth straight month that the index languished below the neutral 50-point mark, suggesting that factory sector output growth remains under pressure.
Encouragingly, two of the key subcomponents of the headline PMI, namely the new sales orders index and the business activity index, improved in November.
In October, SA registered a trade deficit of R4.4bn compared to a surplus of R6.95bn recorded in September. This change was driven by a decline in exports of nearly R11bn, mostly on the back of a sharp fall in the export of precious metals and stones and vegetable products. However, for the 10 months to October, the trade deficit narrowed to R14.3bn from R59.5bn recorded over the same period in 2015.
The weaker rand exchange rate (in 2016 compared to 2015) seems to have counteracted lacklustre external demand while also weighing on domestic demand for imports, contributing to the improvement in the trade balance over the year.
