An early economic growth indicator for SA compiled by the Bureau for Market Research (BMR) declined during October‚ reflecting strikes in the mining sector and “extreme instability”‚ the BMR said.
Its index‚ which points to trends in the economy six months in advance‚ declined to 108 points in September from 109 points in August.
“This trend is expected to continue on the back of further anticipated labour activity‚ continuing dismissals and retrenchments up to the end of November 2012‚” it added.
Thousands of miners were sacked after a series of wildcat strikes across the industry in the past few months‚ which began with a violent uprising at Lonmin's platinum mine at Marikana.
Many have been taken back after negotiated wage settlements‚ but the unrest has undermined investor confidence in SA and led to two credit rating downgrades.
A spike in household consumption ahead of the year-end holidays was likely to provide some impetus to the indicator‚ which includes the JSE All Share Index‚ platinum prices and oil prices‚ the BMR said.
“This optimism could be enhanced or depressed depending on the policy decisions flowing from the ANC (African National Congress) conference in Mangaung‚” said BMR analyst Andries Masenge.
The ANC will hold its elective conference in Mangaung next month. It will decide whether President Jacob Zuma will remain head of the party and is expected to usher in changes to economic policy.
SA’s official leading indicator for the business cycle nudged higher for the second month in a row during August‚ but the pickup did nothing to dispel the view that economic growth is losing momentum.
Analysts have been revising down their growth forecasts to take account of the effects of the deepening global slowdown and widespread strikes in mining.
Consensus forecasts predict the economy will expand 2.5% this year after growth of 3.1% last year‚ but the risks of downward revisions are mounting. - I-Net Bridge