Following a string of long autumn holidays stretching from late March to early May, during which the holiday spirit tends to become all prevalent, it is with a shock that key economic data suggest all is not well in the economy.

April new car sales were 10.7% down on a year-a-ago, and car exports 33% down, making for a steady slide so far this year, well ahead of what the motor trade was dreading at the start of the year.

Electricity output in March was 1.2% down on a year ago, keeping the electricity constraint on businesses unchangingly tight.

The Kagiso Purchasing Managers Index (PMI) fell to 47.4 in April (down 2.9 from 50.3 in March), the lowest reading since mid-2011, and not very promising for manufacturing prospects these next six months.

Striking platinum workers are yet to return to work after 14 weeks off the job, with AMCU formally rejecting yet again the latest employer offer of up to 10% wage increases. Mine employers may ere long approach striking workers directly to see whether any want to return back to work (telephone surveys suggesting two-out-of-three do).

The quarterly Labour Force Survey by Stats SA for 1Q2014 also was cheerless. Formal employment rose by +7 000 in the quarter, but informal employment plunged -129 000, for a net loss of -122 000 jobs.

The number of unemployed rose by +237 000 to 5.1million, and the number of discouraged workers (not even trying to look for a job) rose by + 154 000 to 2.3 million, for a total inclusive rise in unemployment of +391 000 to 7.4 million, the highest level in years.

This meant that the inclusive unemployment rate rose to 33% in 1Q2014 from 31.7% in the 4Q2013,
At least credit growth at 8.8% in March was roughly in line with nominal GDP growth, although household credit increased only minimally while corporate credit rose by double-digit. Also, the JSE All Share reached record highs above 49 000 and the Rand maintained its sideways movement near 10.50:$.

Still, with new jobs scarce, household borrowing at a standstill and income gains constrained, the outlook for consumption spending is heavily constrained.
 
Cees Bruggemans
Consulting Economist
Bruggemans & Associates
Website  www.bruggemans.co.za
Email   economics@bruggemans.co.za
Twitter   @ceesbruggemans
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