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Brief note intended as a more regular interface with our clients. The emphasis is to provide our interpretation of important economic events, such as South African Reserve Bank interest rate statements, and key data releases, including GDP growth figures.
The hope of a possible start of the rebalancing of the economy in favour of the construction and manufacturing sectors, which was fuelled by trends in official data in the second half of 2013 and the buoyant fixed investment and export indicators in Q1, was dashed this quarter. Not only is the manufacturing sector clearly taking strain, with fixed investment and export indicators deteriorating, but the building sector results also signalled a halt of the expansion in non-residential building activity. The second quarter had a number of features that may have impacted negatively on general business conditions. These include the continuation of the strike in the platinum mining sector, industrial electricity users having to cut back on electricity usage as supply came under pressure, as well as the low level of trading days due to various public holidays. In all, the survey results imply that economic growth will remain weak during Q2.
