/ 10 June 2013

Economic week ahead: SA’s mining, retail figures dominate

Gold miners are at high risk of contracting the respiratory disease silicosis as a result of inhaling microscopic particles of silica
Gold miners are at high risk of contracting the respiratory disease silicosis as a result of inhaling microscopic particles of silica

Mining, manufacturing and retail trade figures will dominate South Africa's data calendar this week. Overseas, manufacturing retail sales numbers and consumer sentiment readings in the United States, industrial output and employment data in Europe as well as a series of key figures in Asia will set the tone for global markets over the coming days. Here is your guide. 

Africa 
Egypt on Monday will release last month's consumer price index (CPI), Mozambique's central bank will meet to decide on interest rates and Uganda will report April's M3 money supply.

Although inflation is on the rise in Mozambique, it remains relatively low and under control. As a result, most economists expect the Banco de Moçambique's monetary policy committee to leave rates unchanged for a seventh consecutive month. 

On Tuesday, South Africa – Africa's largest economy – will release April's mining and manufacturing figures and Egypt will release April's production index. Analysts at 4CAST expect South Africa's latest manufacturing figures to show that output declined 0.4% in April from a year earlier. 

South Africa on Wednesday will report April's retail trade figures and Ghana will release May's CPI numbers. Namibia's consumer inflation figures will follow on Thursday. 

Consensus is that South Africa's retail sales rose 3.2% from a year earlier in April, up from a 2.8% year-on-year increase in March. Ghana's CPI is likely to show that inflation continued its upward trend in in May. Inflation in Namibia, on the other hand, is expected to remain within the central bank's comfort level. 

Elsewhere on the continent this week, Angola is expected to report last month's CPI figures. Kenya will report April's overseas remittances figures. Mauritius will release international reserves figures and Tanzania will report March's M3 money supply. 

United States
Thursday's May retail sales data and Friday's preliminary June consumer sentiment reading are the highlights on an otherwise light US data calendar this week. 

Most economists believe that an improving labour market – and the increased consumer confidence that comes along with that – probably boosted retail sales to their biggest increase in three months in May. The median forecast among economists surveyed by Bloomberg is that retail sales rose 0.4% in May from a month earlier, an improvement on April's 0.1% increase. Excluding automotive and petrol sales, purchases probably rose by 0.3%. 

On Friday, the Reuter's/University of Michigan consumer sentiment index is expected to remain unchanged at 84.5, a six-year high. The index surged 8.1 points from April to May.

Also on Friday, markets will scrutinise May's industrial output and producer price inflation figures. 

Industrial production – which measures output at factories, mines and utilities – is expected to show a 0.2% increase in May following a 0.5% drop in April. Manufacturing – which accounts for 75% of total output – is projected to rise by 0.2% as well after having fallen in April and March. 

Friday's producer price index (PPI) data is likely to show that prices at the factory gate rose 0.1%, month on month, in May. Less food and energy, prices probably rose by the same rate. 

Europe
On Tuesday the National Institute of Economic and Social Research (NIESR), a British think tank, will release its latest estimate of the British economy's performance in May and government will release April's industrial production figures. 

NIESR's previous report suggested that the country's economy grew by 0.8% in the three months ended in April. This week's report is likely to provide further evidence that the UK's economy is slowing improving. Industrial output figures are also likely to show improvement, likely to slowing to a 0.7% contraction in April from a year earlier from a 1.4% contraction in March. 

Officials will release Europe's latest industrial production figures on Wednesday. Consensus is that output declined 0.1%, month on month, in April. On an annual basis, the rate of decline probably slowed to 1.2% from 1.8% in March. 

Wednesday will also bring unemployment figures from the United Kingdom. Analysts expect the jobless rate to have remained unchanged at 7.8% in April. 

The final reading of May inflation in the 17-country eurozone, due for release on Friday, is likely to come in at an annual rate of 1.4%. That's below the European Central Bank's target of below 2.0%. 

Friday will also bring eurozone employment figures for the first quarter. The latest unemployment figures for the region showed that the jobless rate climbed to 12.2% in April, a record high. 

Asia 
China – the world's number two economy – released official trade data on Saturday. The release showed that exports posted their lowest rate of growth in almost a year last month while imports fell unexpectedly. 

Several more key pieces of economic data followed on Sunday: May's CPI, PPI, industrial production, retail sales and urban fixed investment figures. The picture these releases painted was equally grim. Lethargic domestic demand is not sufficiently offsetting the deleterious effects of waning exports and China's economy appears to be losing further momentum. 

In the week ahead, Japan – Asia's number two economy – will come to the fore. Japan's Cabinet office will report private-sector machinery orders data – a leading indicator of capital spending – and the country's central bank will release its corporate goods price index (CGPI) – a measure of producer inflation – for May on Wednesday. 

Analysts expect the CGPI to show a 0.6% rise from a year earlier, the first year on year gain in 14-months. Economists surveyed by Market News International expect machinery data to show that core orders – which exclude volatile demand from utilities and for ships – fell 8.1% from March to April. 

If the forecast proves accurate, April would be the first month in three in which orders declined. Officials have projected that core orders in the April to June quarter will fall 1.5% from the previous. This would mark a fifth straight quarterly drop. 

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