The rate of unemployment is expected to have improved slightly in the fourth quarter (Q4) on the back of seasonal hiring. Jobs data will be released on Tuesday.
Economists believe the unemployment rate will decline slightly to 27.1% from 27.5% in the third quarter.
The unemployment rate however remains stubbornly high and the low economic growth rate is unable to make a dent on the jobless numbers.
Stats SA to release sales, production figures
Analysts are expecting that the sales and production figures from various sectors to be released by Statistics South Africa this week, will largely have a positive influence on economic growth in the last quarter of 2018.
Stats SA will release Manufacturing, Retail and Mining sales and production figures for December 2018 this week.
Economists agreed while Mining output is expected to drag growth in the last quarter of 2018, Manufacturing and Retail trade sales figures are expected to boost economic growth in the period under review.
An economist at Econometrix, Laura Campbell, says she expects a decline in Manufacturing sales and production in December 2018, compared to November 2018.
“The slackening off in global economic growth which is in part due to the growing trade tensions between the US and China and this weighed down demands for manufactured exports from South Africa. Economic activity domestically also remains weak, which is also likely to have weighed down on the demand for manufactured goods. And then at the margin, the fact that load shedding was implemented in late November and continued into December may have also dampened the growth in Manufacturing Production.”
Campbell says she expects retail trade sales to have remained at a positive three percent in December 2018. She says a drop in the petrol price in December, as well as an uptake of unsecured loans by consumers in the period, will contribute to the positive retail sales number.
“There are a number of factors that are likely to have provided a support for sales in December, these include the fact that the petrol price was reduced significantly in December, and there’s also been evidence provided by the private sector credit extension data that households continue turning to credit such as unsecured loans in order to fund and maintain spending patterns in December. On the other hand the fact that interest rate were raised at the end of November will have raised household debt servicing costs, which will have eroded their disposable income.”
An economist at Nedbank, Nicky Weimar, says Mining output is expected to be depressed in December 2018, while also putting downward pressured on GDP in the last quarter of 2018.
“You saw declines in Mining Production in October, you saw it in November and we don’t expect any fireworks in December either, and so mining will probably be a negative, it probably be a drag, a drain on GDP in the final quarter.”
Weimar says the South African economy is expected to have expanded by 1,5% in the last three months of 2018. She says the expected growth is not nearly enough compared to what is needed to create jobs and a vibrant economy – but she says it is positive, nonetheless.
“So we look at the outlook for the final quarter, you probably going to have another quarter of expansion in this economy which is greater news because we’ve had extremely weak performances over the last couple of years but its probably not going to be quite as robust as the bounce we saw in the third quarter, it will probably be a bit slower.”