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Standard Bank Group
The SA Daily 02 October 2018

So far, H2 too looks bleak

  • We contemplate a number of growth indicators, for colour around economic momentum in H2:18. These include the manufacturing PMI, vehicle sales for September, and electricity consumption for August. So far, the indications are that H2:18 growth will be bleak, as in H1:18.
  • Total new vehicle sales volumes growth contracted 1.9% y/y in September, following the 2.5% y/y contraction in August. Further, the Absa manufacturing PMI for September fell to 43.2 pts, below August’s 43.4 pts, reflecting that domestic business conditions deteriorated further in September. Furthermore, the SARB’s leading economic indicator retreated to 2.0% y/y (-0.9% m/m) in July, after 5.1% y/y (0.8% m/m) in June.
  • The combined data so far reflects continued economic weakness. Therefore, the risks to our 0.9% GDP growth forecast for 2018 are skewed to the downside. 

 


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