/ 12 May 2014

Economic week ahead: SA’s latest retail sales figures

South Africa and the United States will report retail sales numbers this week.
South Africa and the United States will report retail sales numbers this week.

Over the coming days, South Africa and the United States will report retail sales numbers, the eurozone and Japan will give updates on economic growth, and China will release industrial production figures. In the background, global markets will keep a close eye on Ukraine for signs of further trouble. Here is your guide to the data releases, central bank meetings and other events likely to make headlines during the week ahead.

Africa
South Africa’s economic week will begin with first quarter house price data from Absa on Monday and Statistics South Africa (Stats SA)’s March mining report on Tuesday. Attention will turn to the South African Chamber of Commerce and Industry (Sacci)’s April business confidence index readings and Stats SA’s March retail sales figures on Wednesday.

Analysts at 4CAST expect Stats SA’s latest retail data to show that consumer purchases slowed to 0.9% year on year growth in March from 2.2% growth in February, which was a four month low.  

March’s wholesale and motor trade numbers will follow from Stats SA on Thursday. Friday will bring Wesbank’s fourth quarter vehicle market index, Lightstone’s April residential property indices and the latest Spark ATM cash index.

Elsewhere on the continent, five countries will release April’s inflation updates over the coming days. Markets expect figures from Senegal, Angola, Ghana, Namibia and Nigeria between Tuesday and Friday.

In addition to these price reports, Egypt will release its March production index this week. Uganda, Namibia and Tanzania may release money supply figures. And Angola and Ghana will update economists and investors on their gross and net reserve holdings for March.

Finally, as Africa’s economic week draws to a close on Friday, ratings agencies Standard & Poor’s (S&P) and Fitch will provide sovereign ratings updates for a number of countries. S&P will update on Botswana, Egypt, Ghana and Morocco. Fitch will render the company’s latest judgement on Mozambique.

United States
Tuesday’s retail sales report is the big item on America’s data calendar this week. Consumer spending accounts for around two-thirds of US GDP, so economists and investors pay close attention to this data. Analysts expect the release to show that consumer purchases rose 0.4% last month, down from 1.1% growth in March.

Also set for release on Tuesday, the UC Census Bureau’s March business inventories data will probably show that stock levels rose 0.5% in March, up slightly from a 0.4% monthly rise in February. The National Federation of Independent Businesses (NFIB)’s small business optimism index, scheduled for release later in the day, likely rose further in April.

On Wednesday, America’s producer price index for final demand (PPI-FD) – a family of indices that measure the average change over time in the prices achieved by domestic producers of goods and services – likely slowed to 0.2% growth last month from 0.5% previously.

On Thursday, America’s consumer price index (CPI) for April is likely to show that headline inflation accelerated slightly to 0.3% in April from 0.2% in March.

Finally, on Friday, attention will turn to April’s housing starts data and this month’s consumer sentiment index from Reuter’s/University of Michigan. Consensus is that the seasonally adjusted annualised rate of new home construction rose to 980 000 units last month from 946 000 in March. Consumer sentiment likely improved to 84.5 from 84.1 in February, nearing the recovery high of 85.1 reached in July of last year.

Europe
Global markets will continue to keep a nervous eye trained on Ukraine on Monday. Separatists in the country’s eastern regions held referendums on self-rule on Sunday. Europe and the United States do not recognise the votes’ legitimacy and Ukraine’s government has called on its citizens to boycott.

The separatists have indicated that they may hold a second referendum on joining the Russian Federation next week. Some analysts believe that Russia’s President Vladimir Putin could use the results of the two referendums as an excuse to push further into Ukrainian territory following Russia’s invasion of the Crimean Peninsula in February.

On Tuesday, Germany’s ZEW Centre for European Economic Research will report its May index of investor confidence. Sentiment in Europe’s largest economy has deteriorated for the past four months and is expected to slip further.

On Wednesday, the Bank of England will release its quarterly inflation report, which contains updated estimates for inflation and economic growth. The UK’s economy has been showing signs of strong growth recently. As a result, economists and investors will be looking for an explanation from the central bank as to why it appears to be in no rush to begin scaling back its massive stimulus programmes.

On Thursday, attention will turn to the euro zone’s preliminary estimate of first quarter growth. Consensus is that the currency bloc’s gross domestic product (GDP) expanded 0.4%, quarter on quarter. GDP reports from Germany and France – Europe’s number one and two economies, respectively – are also due out on Thursday.

Asia
India will conclude the longest election in the country’s history this week. The ninth and final phase of parliamentary elections that began on April 7 will take place on Monday.

China – the world’s second largest economy – will report last month’s industrial production, retail sales and urban fixed investment data on Tuesday. The country’s industrial production data – a key leading indicator of overall economic growth – will be particularly scrutinised.

Economists polled by Reuters expect China’s release to show that output expanded by 8.9% from a year earlier in April, up slightly from March’s 8.8% year on year growth. Retail sales probably grew by 12.2% from a year earlier, the same rate of growth recorded in the previous month. Tuesday’s figures will also likely show that fixed investment grew by 17.7%, year to date, in April.

On Wednesday, attention will shift to Japan – the world’s fourth largest economy – as officials release the country’s latest economic growth figures. Economists expect Japan’s gross domestic product (GDP) to have surged to an annualised growth rate of 4.2% during the first quarter. Analysts attribute this mainly to high consumer spending in advance of an April 1 consumption tax hike from 5.0% to 8.0%, the first in 17-years.