Economy & Business News - 26 February 2024

26 Feb 2024

ECONOMY & BUSINESS

• Global unrest fuelling shipping costs. The United Nations Conference on Trade and Development (Unctad) estimates that transits passing through the Suez Canal have decreased by 42% compared with its peak, owing to attacks on Red Sea shipping lanes. With major players in the shipping industry temporarily suspending Suez transits, weekly container ship transits have fallen by 67%, and container-carrying capacity, tanker transits and gas carriers have experienced significant declines, notes the global body in a report called 'Navigating Troubled Waters. The Impact to Global Trade of Disruption of Shipping Routes in the Red Sea, The Black Sea and the Panama Canal'. (Source)

• Premium car market outlook. Interest rates, living costs, fuel prices and new-vehicle price tags are all high, driven by not only international turmoil, but also poor management of the domestic economy, especially in terms of power supply and logistics channels such as ports and rail infrastructure. South Africans have reacted by opting for smaller and cheaper cars, as well as cars offering more extras and luxury compared with others in the same price band. (Source)

• Annual consumer price inflation was 5,3% in January 2024, up from 5,1% in December 2023. The main contributors to the 5,3% annual inflation rate were: food and non-alcoholic beverages (increased by 7,2% year-on-year and contributed 1,3 percentage points); housing and utilities (increased by 5,7% year-on-year and contributed 1,3 percentage points); miscellaneous goods and services (increased by 5,4% year-on-year and contributed 0,8 of a percentage point); and transport (increased by 4,6% year-on-year and contributed 0,7 of a percentage point). (Source)

• The RMB/BER Business Confidence Index (BCI) slipped by two points to 31 in the fourth quarter of 2023. This means that less than a third of respondents to the survey were satisfied with prevailing business conditions. (Source)

• Unemployment increases. South Africa’s unemployment rate increased in the fourth quarter of 2023 following a third-quarter drop to its lowest point for the year, suggesting the country’s volatile economic activity and poor business confidence will continue to hinder employment objectives. Quarterly labour force survey data released by Stats SA on Tuesday shows the unemployment rate increased 0.2 of a percentage point from 31.9% in the third quarter, leaving the official unemployment rate at 32.1% in the fourth quarter of 2023. (Source)

• Land transport. The volume of goods transported (payload) decreased by 2,5% in December 2023 compared with December 2022. The corresponding income increased by 3,0% over the same period. The number of passenger journeys increased by 9,9% in December 2023 compared with December 2022. The corresponding income increased by 6,9% over the same period. (Source)

• Workers get access to retirement funds. A bill overhauling South Africa’s retirement regime was adopted by all parties in the National Assembly on Tuesday, though several MPs warned of the danger of workers withdrawing too much money from their retirement funds, depleting their resources for retirement. In adopting the Revenue Laws Amendment Bill, which provides for the introduction of a two-pot system on 1 September, MPs also urged retirement fund administrators to educate their members about the new system so that they properly understood its implications for their savings.