From persistent load-shedding to South African elections, we have had an interesting start to the month of November. Eskom has varied the stages of blackouts, moving the nation back and forth from stage 2 to stage 4 load-shedding, making it increasingly harder for businesses to remain operational during this time. The Bureau for Economic Research (BER) estimates the continued spontaneity of rolling blackouts will have serious consequences for South Africa’s real GDP growth in the near future. The local elections are completed and voter turnout of under 30% points to high levels of voter apathy and service delivery dissatisfaction. These have resulted in three times more councils now being “hung” municipalities as compared to the last election. What will be important to observe is how the bargaining parties manage the coalition arrangements.
On the data front, there has been a swath of new data releases that provide a deeper look at how our economy has been performing over the past several months. More specifically, ABSA recently released PMI data that indicates business activity declined, moving from 54.7 in September to 53.6 in October. Some major contributors to this decline was the persistent load-shedding that commenced in October, as well as the strikes the National Union of Metalworkers in South Africa (NUMSA) organised during this time period. The HIS Markit PMI also fell in October in comparison to September, which is further evidence business activity is not what it needs to be for South Africa’s economy to prosper. Additionally, the Automotive Business Advisory Council released vehicle sales data that indicated sales for October increased by 6.1% year-on-year, but is a far cry from the 15.8% year-on-year increase in September. On the whole, there’s much uncertainty surrounding the growth of our economy, but that doesn’t mean there’s no hope.
If you find you need a helping hand, please reach out to the COBRA Initiative for business services and financial support.