Economic week ahead: Looking for growth
South Africa’s data calendar is comparatively light this week. Statistics South Africa (Stats SA) will report last month’s liquidations figures along with the previous month’s tourist accommodation, transport and food and beverage sales on Monday. The South African Reserve Bank’s September leading indicators will follow on Tuesday along with Stats SA’s second quarter employment statistics.
On Thursday, Stats SA will release August’s contract price adjustment provisions (CPAP) work group’s indices and August’s producer price index (PPI) readings. Economists expect the PPI report to show that prices at the factory gate rose 0.7% on a monthly basis, or 7.9% from a year earlier, last month. Closing out South Africa’s week on Friday, the National Consumer Regulator (NCR) will release second quarter credit market and credit bureau monitor reports.
Elsewhere on the continent, Morocco will release last month’s consumer price index (CPI) inflation readings on Monday. The country’s central bank will announce this month’s rates decisions the following day.
As the week rolls on, Kenya will report second quarter growth figures. Namibia, Ghana, Kenya and Morocco will update on money supply sometime over the coming days and Zambia may release September’s CPI figures this week or early next. Finally, investors will be on the lookout for Fitch’s sovereign rating update for Ghana and for Moody’s Investor Services Zambia report. Both updates will be released on Friday.
America’s economic week will begin on Monday with last month’s existing home sales tallies. Consensus is that sales rose for a fifth consecutive month to a seasonally adjusted annualised rate of 5.18-million units in August from 5.15-million in July.
August’s new home sales report, which will follow on Wednesday, should be positive as well. Analysts believe sales likely rose from a seasonally adjusted annualised rate of 412 000 units in July to 430 000 in August. Attention will turn to durable goods orders data on Thursday. Overall orders soared by 22.6% in July due to a spike in aircraft sales. Excluding transportation, however, orders slipped 0.8% for the month. Analysts expect August’s data to reveal a 17.0% fall-off in overall orders, but 0.8% rise when excluding transport.
On Friday, this month’s final consumer sentiment readings from the University of Michigan and government’s final second quarter growth figures will take centre stage. Analysts believe that the Reuter’s/University of Michigan consumer sentiment index for September will remain unchanged from a preliminary reading of 84.6, which was up from August’s final reading of 82.5.
The Commerce Department’s latest gross domestic product (GDP) figures are likely to show that the world’s largest economy grew by 4.6% quarter on quarter in the three months to June. If confirmed, this would mark the fastest rate of expansion since the third quarter of 2013.
A series of purchasing managers’ index (PMI) reports are the big items on Europe’s data docket this week. As the region continues to struggle, these forward-looking measures will be closely scrutinised for signs of hope. First up on Tuesday are reports covering the euro zone as a whole and its two largest component economies, Germany and France.
The euro zone’s composite PMI fell to 52.5 last month, its lowest level since December 2013. The gauge may have remained unchanged in September as the currency bloc’s manufacturing PMI held steady just above the 50-mark separating expansion from contraction and the region’s services PMI slipped slightly. Germany’s manufacturing and services PMIs probably gave back some ground this month, but remained in expansion territory at 51.2 and 54.6, respectively. France – Europe’s number two economy – was probably not as lucky. Consensus is that the country’s manufacturing PMI remained firmly in contraction territory at a reading of 47.0. France’s flash services PMI may come in right on the dividing 50-line.
On Wednesday, attention will turn to business sentiment indices from Germany’s Ifo Institute. Ifo’s business climate, current conditions and expectations gauges will all probably slip slightly amidst continuing economic and political uncertainty in the region. More sentiment gauges will follow from GFK in Germany, INSEE in France and ISAE in Italy on Friday. GFK and INSEE’s consumer sentiment measures will likely remain unchanged. ISAE’s business sentiment index may slip slightly.
Economists and investors will be on the lookout for HSBC’s preliminary China manufacturing purchasing managers’ index (PMI) print on Tuesday. This forward-looking measure of economic activity in the world’s number two economy fell to 50.2 in August. Markets will be watching to see if it remained above the all-important 50-mark this month.
As the week rolls on, markets will be on the lookout for Taiwan’s latest commercial sales and industrial output data on Tuesday along with New Zealand’s August trade figures. Thailand’s export, import and trade balance tallies will follow on Wednesday along with the Reserve Bank of Australia’s financial stability review. More trade reports – from the Philippines and Hong Kong – are expected on Thursday along with the Central Bank of the Republic of China (Taiwan)’s latest rates decision.
Closing out the week, Japan’s Ministry of Internal Affairs and Communications will release August’s consumer price index (CPI) data on Friday. The median forecast among economists surveyed by Market News International is that national core CPI – which excludes perishable foods, but includes energy – rose 3.2% from a year earlier. If this forecast proves accurate, August would mark the 15th consecutive month of year-on-year consumer price rises in Japan.
Matt Quigley writes the Mail & Guardian’s weekly economic preview. You can follow him on Twitter at @mattquigley.