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Research Notes are more in-depth analyses undertaken by BER economists and consultants.
Brief note intended as a more regular interface with our clients.
The Impumelelo Economic Growth Lab is a unit at the BER, focussing on generating policy-relevant work and capacity building to achieve economic success in South Africa. This work is freely available to access on our website.
The aim of this note is to summarize some specific insights and trends observed in the 2011Q4 round of BER surveys as a first indication of developments in the real economy. On balance, the survey results point towards an acceleration in GDP growth in 2011Q4 - relative to the third quarter. However, the fact that business confidence remains low highlights the downside risks to the growth outlook, particularly given the current global economic environment and threatening impact of the European crisis.
Read MoreThe RMB/BER BCI declined by one index point to 38 in 4Q11. Sentiment improved notably in the retail and wholesale trade sectors, deteriorated further in new motor trade and remained largely unchanged in manufacturing and building. The survey implies a slightly faster GDP growth rate in 4Q11 after the soft patch in 3Q11
Read MoreAgainst the backdrop of much weaker global economic prospects than during early 2011, Finance Minister Pravin Gordhan’s third Medium-Term Budget Policy Statement (MTBPS) provided a more downbeat outlook for the SA economy and the fiscal position than was the case in the February Budget. Besides announcing a package worth R25bn over six years to boost the competitiveness of SA Inc and moves to attract more foreign companies to the JSE, the MTBPS contained no apparent headline grabbing announcements. However, in our view the most significant thread running through the document and the Minister’s speech was a welcome confirmation that, in order to contribute to a higher GDP growth rate and employment in future, the composition of government outlays has to shift from consumption to investment.
Read MoreThis comment summarizes some specific insights from cross-cutting trends observed in the third quarter round of BER surveys in order to provide a snapshot of the latest developments in the real economy. On balance, the 2011Q3 survey results sensitises one to the possibility that growth in underlying demand might be running out of steam faster than anticipated. Another key trend of the results is that uncertainty has increased notably in Q3. At this stage our reading of the results is that it signals a continuation of the Q2 growth soft-patch and that we will continue to muddle through until something provides the economic recovery with the necessary second wind.
Read MoreThe steep decline in the RMB/BER BCI from 48 to 39 and the underlying developments in all the sectors, except for the retail trade, indicate that GDP growth probably remained weak and that the upturn lost momentum in the third quarter.
Read MoreAdverse global economic developments since the release of the BER’s forecast update during early July culminated in renewed financial market panic of late. While the downside risks to the global economic outlook were highlighted in the BER’s 2011Q3 Economic Prospects publication, recent events warrant a re-look at some of the assumptions underlying our forecasts. The aim of this note is to give an overview of recent developments and to provide a qualitative feel for the direction of change (and the risks) to our early July forecast rather than exact numbers for all the forecast variables. A more detailed update of the forecast will be provided in early October.
Read MoreThe RMB/BER BCI declined by 7 index points to 48 in 2011Q2. Business confidence declined in the retail, wholesale and motor trade, remained unchanged in the manufacturing sector and increased slightly in the building sector.
Read MoreThe RMB/BER BCI jumped from 44 points in the fourth quarter of 2010 to 55 in the first quarter of 2011. Business confidence increased in the motor trade, wholesale trade and manufacturing sector and declined in the retail and building sectors. The latest RMB/BER BCI results imply prospective higher levels of corporate investment... and that the growth momentum is spreading, with the exception of the building sector, to more industries than merely the trade sectors. In all, the sharp increase in the RMB/BER BCI during the first quarter signals that strong GDP growth was probably sustained during the beginning months of 2011
Read MoreIn light of a fluid domestic policy environment, Finance Minister Pravin Gordhan’s second Budget provides something for most of the key stakeholders in the SA economy. In line with President Zuma’s state of the nation address that highlighted job creation as government’s number one priority, the budget contained proposals to improve the skill base of the economy and assist in improving the high youth unemployment rate. While measures are being put in place to improve job growth, the poor will continue to benefit from social assistance spending, while consumers received personal income tax relief that exceeded expectations. Big business can look forward to improved infrastructure going forward, while Mr. Gordhan again pledged that both fiscal and monetary policy will continue to provide a stable macroeconomic environment conducive to private sector activity.
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