Next week once again brings a full slate of economic data releases.
The week begins with the Absa purchasing managers’ index (PMI) for February, due on Monday.
The PMI dipped in January and economists will be watching closely to see whether the return of load-shedding in February made its way into manufacturers’ feedback.
Previous reports noted that the manufacturing sector started 2025 on a weak footing, with the Absa PMI falling 0.9 points to 45.3 in January.
Investec economist Lara Hodes forecast that the Absa PMI would have risen slightly in February but remained in contractionary territory at about 48.5.
On Wednesday, S&P Global will also release its February PMI, providing a broader view of business conditions across the private sector.
According to S&P Global’s January report, the private sector started 2025 on a weak footing as business conditions deteriorated sharply in January.
The PMI fell to 47.4, down from 49.9 in December, marking its lowest level since July 2021. A sharp drop in client demand was the key driver behind the contraction, the ratings agency said.
On Tuesday, Stats SA will release the fourth-quarter GDP data, which will provide a critical update on economic activity after the economy contracted 0.3% in the third quarter.
Lisette IJssel de Schepper from the Bureau for Economic Research (BER) forecast that “the economy is likely to have expanded in the fourth quarter, but the potential revision to the third quarter data makes it more difficult than usual to estimate by how much”.
She noted that in the third quarter, the main drag from the production side of GDP came from agricultural production, which plummeted 28.8% quarter on quarter.
“Credible research from the Bureau for Food and Agricultural Policy has since shown that the 2024 quarter one to 2024 quarter three contraction in agricultural production is a severe overstatement of what actually transpired in the sector, and indications are that a significant revision will be made to the historic agriculture data,” she said.
On Thursday, the Reserve Bank will release the fourth-quarter current account data for 2024. In the third quarter, the current account deficit narrowed to R70.8bn, the smallest gap in more than a year, driven by an improvement in the services and income balance.
“We believe the current account deficit narrowed slightly to 0.9% of GDP in the fourth quarter from 1% in the third quarter, due to a wider trade surplus as imports fell faster than exports over the quarter,” Nedbank’s economists said in a note.
On Wednesday, the BER and RMB will release their 2025 first quarter business confidence index, which will provide insight into business conditions and business sentiment developments in the economy.
Hodes projected business confidence to have risen modestly in the first quarter of 2025 to about 47 from 45 previously.
“While the improved electricity supply environment has helped to boost sentiment, a number of other constraints continue to hamper confidence levels in the corporate segment,” she said.
“While progress in a number of areas has been made, more needs to be done to significantly boost confidence levels on a sustainable basis.”
New vehicle sales for February are also due. “New vehicle sales are likely to have grown by 5.2% year on year in February, a moderation from 10.4% in January,” Nedbank economists projected.
“Growth is slower than in January because of the seasonal jump in vehicle sales at the start of every year. The positive outcome, though, reflects a slow recovery in demand as household finances improved due to modest interest rate cuts, lower prices and a boost from withdrawals from the two-pot retirement system,” the bank said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.