Wednesday 12 March 2008

Well we might have over-reacted..!?

Anyone who was in Jozi in January would have had at best a moment of wondering how the hell this country is gonna survive due to the blackouts, and at worst would have actually submitted your british visa applications.

Well it seems all the predictions of resulting economic colapse may have been bit hasty. Manufacturing data for January came out today and shows that - while the sector is struggling - it is not on the brink of collapse. Year on year production increased by 1.4% in January. This compared to an 0.3% increase in the year to December 2007.

About time for some good news.

14 comments:

Dr Phil said...

an exchange rate plumbing 8 to the dollar (a dollar falling fast) will cushion/mask a lot of other problems.

but the crunch is coming. dead cat is bouncing, but not for much longer.

Alex said...

I am optimistic - I need to be as I want a job and the UK is lovely but just not home....

Greg said...

Ja, but its bad for my pops who is gonna get pumped when he visits in May, unless the exchange rate has recovered by then...

Paul said...

The x-rate averaged at 7.0 for the month and only rose up to 7.5 in the last couple of days.
Not to say that there's no shit ahead, but these stats are promising.
The RMB/BER's business confidence index stats just released however are far less hopeful.

Dr Phil said...

ya true, but it slid from 6.60 or so against a rapidly falling dollar. and against the pound and euro we were down more in jan (EU is by far the bigger trade partner)... it's good for manufacturers (mostly), but still way too volatile.

with such a big external deficit, global inflation pressure and liquidity drying up, i think 2008 is gonna be a rough year...

Kez said...

It is so nice to read all of this and actually understand what you boys (and girls) are talking about, confidence indexs, dead cats! What a wonderful MBA world it is :D It is time the world got a shake up (hippy hat on) it cannot survive as it is, we need a mind shift :)

Greg said...

Ja, what he said. The xrate against the aussie dollar had been steady at about 6.5 for a while before all the power shit happened. But i know vokkol about this economic stuff.

Paul said...

Remember that this data is just manufacturing production....
.... so it just shows that we can still produce more than last year despite having severe and unexpected electricity shortages in that month.
Thinking about it again, I don't see how currency movements could mask that.
Whether we can do anything with that production is another issue altogether.

Paul said...

The equivalent mining figures are just out and aren't quite as pretty. Mining production in January was down 10.7% on January 2007.
Eish!

Dr Phil said...

"It is time the world got a shake up (hippy hat on) it cannot survive as it is, we need a mind shift :)"

Kez, Kez, Kez. :D

Paul bru you are korrek no doubt - production is production is production, and the recent currency issues won't have had an obvious impact on the Jan numbers. And who knows, if the currency stays around 8 and we can manage the attendant inflationary pressure, then manufacturing may do even better in the coming months. But volatility and uncertainty, and confidence seemingly back to Rubicon speech levels (!), tend to be stronger forces. Our currency is tanking amidst record real commodity prices. That is not good.

Alex said...

Wow so many comments! Well as far as my recent research shows the weaker rand makes SA a more attractive FDI location and real production costs are lowered... But then again couples with pending political instability.... Hmmm R16.10 to the pound makes me happy that I earn pounds at the mo...

Alex said...
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Helz said...

DRINKS ON AL!!!

Alex said...

I AM A STUDENT!!! Therefore drinks are on all of you!!!!