The Reserve Bank this week published the latest quarterly bulletin that painted a bleak picture of household finances. It shows that household expenditure has decreased for the first time in three years.
According to the Reserve Bank, consumption expenditure by households fell by 0.8% in the first quarter of 2019. This follows a 3.2% increase in the fourth quarter of 2018.
The Reserve Bank says the deterioration in household consumption was in line with the decline in consumer confidence in the first quarter of 2019. It further says consumer finances are under pressure due to the prolonged period of weak economic activity, rising unemployment, an increased tax burden and successive fuel price increases.
The bulletin also indicated that wage increases for workers in both the private and public sectors moderated to 4.7% in 2018.
Stats SA also released the latest producer prices index. The Index shows that prices at the factory gates increased 6.4% on an annual basis in May 2019, compared to a 6.5% rise in April.
The annual percentage change in the #PPI for final manufactured goods was 6,4% in May 2019 (compared with 6,5% in April 2019). From April 2019 to May 2019 the PPI edged up by 0,5% #StatsSA https://t.co/JJIiNCUcJi pic.twitter.com/A65zPSQtCe
— Stats SA (@StatsSA) June 27, 2019
Next week the Chamber of Commerce and Industry will release the Business Confidence Index for June. It is expected to rise from 93 to 93.6 index points.
Both Standard Bank and Absa will release the PMI for June. The index measures the health of the manufacturing sector. Both banks anticipate an increase in the index, pointing to a recovering sector.