Release Newsletter, 3^rd Quarter 2016
 

Welcome to the third newsletter for 2016, in which we provide an overview of all the value-addition carried out by IHS Markit’s ReX Economist Team over the past three months. Due to the high frequency of updates made to ReX, it has become essential that we provide a brief presentation of our most recent work. By doing so we hope to provide you with a better sense of the changes to be found in the ReX interface. This newsletter will address the main data releases that had an impact on the newest set of data which will be made available by IHS Markit. We are also proud to present a global and local economic outlook on topics that have shaped the short-to-medium term performance of the South African regional economy. Please enjoy this issue and don’t hesitate to respond your comments on this quarter’s newsletter.
 

Global Economic Perspective

Global economy on hold

The global economy is on an extended hold—as the major central banks ponder their next moves; as the United Kingdom and the European Union begin divorce proceedings; and as everyone nervously watches the twists and turns of the US presidential election. After an extended period of dismal performance, the world economy is set for a rebound during the remainder of 2016. The world economy’s growth has been disappointing for the past successive five quarters (from secondquarter 2015 through second-quarter 2016). During this period, quarterly GDP growth has been unsteady and has averaged only 2.3%—well below its long-term potential of 2.9%. The weak performance has been a truly collective effort, with underperformance being turned in by nearly all three major categories of economies: advanced economies, emerging markets, and developing economies.
 

South African Short-Term Outlook

Economic Outlook
• The second-quarter GDP growth exceeded expectations and accelerated to 3.3% at an annualized basis.
• An unchanged interest-rate policy is now more possible, however political developments remain the biggest risk to the outlook.
• The rand strengthened on the back of stronger portfolio flows during July–August.

South Africa's short-term economic growth drivers are coming under increased pressure
• Structural impediments, led by an inflexible labour market and a lack of sustainable electricity provision, will leave South Africa's GDP growth rate below 2% in the short term.
• South Africa's interest rate stance is skewed towards the upside.
• Lackluster growth will mean small upward increments in the near term to support consumer spending, which remains the primary driver of overall growth in the economy.
 

ReX Feature Updates

Data updates:
• StatsSA Gross Domestic Product Q2
• StatsSA Quarterly Employment Survey Q1 (QES)
• StatsSA Quarterly Labour Force Survey Q2 (QLFS)
• StatsSA CPI & PPI
• SARB Quarterly Bulletin Q2
• SAPS Crime Statistics 2015/2016

Structural changes
• Municipal Boundaries 2016

StatsSA Quarterly Labour Force Survey (July 2016):
• Employment declined in the second quarter of 2016 by 129 000 to 15,5 million. The quarterly decline in total employment was driven by job losses in Services (127 000 or 3,5%), Agriculture (44 000 or 5,0%), Transport (39 000 or 4,4%) and Mining (24 000 or 5,1%).
• Unemployment declined by 90 000 in Q2: 2016 which led to a quarterly decline in the unemployment rate by 0,1 of a percentage point to 26,6%, however during the same period the level of inactivity increased by 379 000.
• Youth unemployment rate remained high at 37,5%. There was approximately 3,2 million young persons aged between 15-24 who are not in employment, education or training.

StatsSA CPI & PPI (August 2016):
• The headline CPI (for all urban areas) annual inflation rate in August 2016 was 5,9% and this rate was 0,1 of a percentage point lower than the corresponding annual rate of 6,0% in July 2016. On average, prices decreased by 0,1% between July 2016 and August 2016.
• The annual percentage change in the PPI for final manufactured goods was 7,2% in August 2016. From July 2016 to August 2016 the PPI for final manufactured goods increased by 0,1%.

StatsSA GDP Release (September 2016):
• South Africa's gross domestic product (GDP) growth rate was 3,3% in the second quarter of 2016. The main contributors were the manufacturing industry (8,1%) and the mining and quarrying industry (11,8%).

SAPS Crime Stats Release (September 2016):
• Overall analysis depicts notable progress towards the reduction of the 17 Community-Reported Serious Crimes.
• The two maps below illustrate the latest crime data available in ReX.
• Map 1 illustrate the Overall Crime Index* for the 2015/2016 financial year while Map 2 plots the differences in the index between 2014/15 & 2015/16.

* IHS Markit provides an Overall Crime Index which measures the overall (total) level of crime in a region. This variable provides a comparative indication of the change in the level of crime among different regions.
 

Municipal Boundaries 2016

• The new 2016 Municipal boundaries have taken effect after the local municipal elections this year.
• The new demarcation will have fewer municipalities compared to 2011 with some municipalities being amalgamated into new municipal areas while others boundaries changed slightly.
• For those subscribing to municipal boundaries, when installing the latest release of ReX, you will have all the latest boundaries.

Click here for an interactive map

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