Consumption in South Africa
South Africa - Consumption
Load-shedding leaves South Africa’s economy reeling in Q1
South Africa’s economy slumped at the outset of the year, contracting sharply in seasonally-adjusted and annualized (saar) terms. According to Statistics South Africa, on a quarter-on-quarter basis and at market prices, first-quarter output fell 3.2% saar (Q4 2018: +1.4% saar). Analysts were surprised; they had expected a more modest downturn. In unadjusted terms and on a year-on-year basis, growth was flat (Q4 2018: +1.1% year-on-year). On the supply side, load-shedding weighed heavily on mining- and manufacturing-sector output, while one-off factors appeared to bruise agricultural-sector output.
A demand-side breakdown, meanwhile, revealed the extent to which this year’s rolling blackouts took their toll on the economy. On a quarter-on-quarter basis, household spending dropped 0.8% saar (Q4 2018: +3.2% saar) amid waning economic sentiment and an uptick in the unemployment rate. Government spending, which rose 1.3% saar (Q4 2018: +0.6% saar), was unable to offset this. Fixed investment, meanwhile, fell for the fifth quarter in a row (Q1: -4.5% saar; Q4 2018: -2.5% saar) as economic uncertainty continued to deter non-residential outlays.
Net exports were equally downbeat. Exports of goods and services tumbled 26.4% saar (Q4 2018: +11.1% saar) on weaker motor vehicle sales. Imports of goods and services, meanwhile, slipped 4.8% (Q4 2018: -16.0% saar). Taken together, foreign trade subtracted 6.7 percentage points from the headline reading—a far cry from the 8.0-percentage-point addition in the fourth quarter of last year.
Commenting on the first-quarter reading, Andrew Matheny, an analyst at Goldman Sachs, noted:
“We draw [some] conclusions […]: (1) load-shedding seemed to weigh more heavily on growth than our estimates implied; [and] (2) weak confidence (as well as load-shedding) appear to have held back household consumption by more than we anticipated. […] We mechanically revise down our forecast for full-year GDP growth for 2019 from 1.5% to 0.6%, but maintain our forecast for 2020 growth unchanged at 2.5%. Given the pattern of weakness in heavy industry and exports, as well as ongoing risks of renewed load-shedding, risk to both forecasts are tilted to the downside.”
The SARB expects the economy to grow 1.0% in 2019 and 1.8% in 2020. FocusEconomics analysts, on the other hand, are still taking recent events into account. A new Consensus Forecast will be released on 18 June.
South Africa - Consumption Data
|Consumption (annual variation in %)||2.0||0.8||1.9||0.6||2.1|
5 years of economic forecasts for more than 30 economic indicators.
South Africa Facts
|Bond Yield||8.03||0.29 %||Jul 11|
|Exchange Rate||13.94||-0.21 %||Jul 11|
|Stock Market||0.1||-0.44 %||Jul 11|
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July 11, 2019
The manufacturing sector decelerated in May, with the annual growth of production slowing to 1.0% from a revised 4.3% expansion in April (previously reported: +4.6% year-on-year).
July 3, 2019
In June, the IHS Markit Purchasing Managers’ Index (PMI) rose from 49.3 in May to 49.7 in June.
June 19, 2019
Consumer prices increased 0.3% month-on-month in May, down from 0.6% in April.
June 12, 2019
In May, the Standard Bank Purchasing Managers’ Index (PMI) fell 1.0 point to 49.3 points.
June 12, 2019
Manufacturing output increased 4.6% year-on-year in April, up from a revised 1.3% increase in March (previously reported: +1.2% year-on-year).