Economic week ahead: SA growth update

Tuesday’s third quarter growth report is the big item on South Africa’s economic calendar this week. Analysts at 4CAST expect the report to show that Africa’s number two economy expanded 1.1% from a year earlier in the three months to September 2014, up slightly from 1.0% in the second quarter.

On Thursday, Statistics South Africa will release October’s producer price index (PPI) and contract price adjustment provisions (CPAP) working group index. Analysts expect the PPI report to show that prices at the factory gate rose 6.6% last month from a year earlier, down from 6.9% in September.

Preliminary October trade figures from the South African Revenue Service will close out the country’s data week on Friday. Consensus is that South Africa’s trade deficit swelled to R7.5-billion last month from R2.9-billion in September.

Elsewhere on the continent, Kenyan President Uhuru Kenyatta and Treasury Secretary Henry Rotich will speak at the African Securities Exchanges Association conference in Mombasa, Kenya, and the Bank of Angola will announce this month’s rates decision on Monday. A decision from the Central Bank of Nigeria’s monetary policy committee will follow on Tuesday.

On Thursday, Zimbabwean Finance Minister Patrick Chinamasa will present government’s 2015 budget to Parliament and policymakers at the Egypt’s central bank will set the country’s benchmark deposit and lending rates.

United States
On Tuesday, a second estimate of third quarter growth is likely to show that the world’s largest economy grew at a slower pace than previously estimated in the three months to September. Consensus is for 3.3% growth, down from an initial estimate of 3.5%.

Also on Tuesday, the Conference Board’s consumer confidence index is likely to show further gains. Analysts expect the sentiment gauge to rise to 96.5, a seven-year high.

On Wednesday, attention will turn to durable goods orders, new homes sales, and personal income and outlays (spending) reports. Durable goods likely fell 0.5% from September to October. New home sales may have risen slightly to a seasonally adjusted annualised rate of 470 000 units in October from 467 000 in September.

October’s personal income and outlays report may show that incomes rose 0.4% in October, up from 0.2% in September. Consumer spending likely rose 0.3%, an improvement on September’s 0.2% decline.

Markets are closed on Thursday in observance of the Thanksgiving holiday. When trading resumes on Friday, the Chicago manufacturing purchasing managers’ index (PMI) will take centre stage. After jumping 5.7-points to a reading of 66.2 – its best in a year – in October, the index probably slid to 63.2 in November.

Sentiment readings from Germany’s Ifo Institute are first up in Europe this week. Consensus is that the think-tank’s economic sentiment and current conditions indices will show some slippage. The group’s business expectations’ gauge, however, may show a slight improvement.

On Tuesday, final third quarter gross domestic product (GDP) figures are likely to confirm that Europe’s largest economy expanded at a seasonally adjusted quarter-on-quarter rate of 0.1% in the three months to September. Year-on-year, this translates into a 1.2% expansion.

On Wednesday, the UK’s Office of National Statistics will release its second estimate of third quarter GDP. Analysts expect confirmation of 0.7% quarter-on-quarter growth.

On Thursday, Oil ministers from the 12-member Organisation of Petroleum Exporting Countries will gather in Vienna to decide policy. Markets will be watching to see what, if any, action the group takes to address sliding oil prices.

Closing out the week on Friday, euro zone inflation data will take centre stage. Consensus is that the region’s harrmonised index of consumer prices rose a mere 0.3% in November, well below the European Central Bank’s inflation target of just under 2.0%.

A slew of data releases from Japan over the coming days will help to shed light on the country’s performance in the fourth quarter. Growth data released last week showed that the world’s third-largest economy slipped back into recession in the three months to September.

First up, on Tuesday, Cabinet Office will release November’s monthly economic report. The Bank of Japan will release minutes from the monetary policy committee’s most recent meeting and October’s corporate services price index (CSPI). Consensus is that the CSPI rose 3.6%, year-on-year, last month after rising 3.5% from a year earlier in September and August.

Next up, on Friday, are last month’s consumer price index, household spending, unemployment, industrial production, retail sales figures, construction orders, and housing starts. Consumer inflation may have risen 2.4%. Household spending likely fell 5.0%. Industrial production may have fallen 1.7% from a year earlier while retail sales climbed 1.5% on the same basis.

Elsewhere in the region, Singapore, Philippines, Taiwan, and India will release third quarter GDP reports. On an annual basis, Singapore’s growth probably picked up to 2.5% from 2.4% previously. Philippines’ expansion rate likely rose to 6.5% from 6.4%. Taiwan’s GDP may have grown 3.8% and analysts anticipate India’s rate of expansion to have slipped to 5.1% from 5.7% in the second quarter.

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