31 May 2017
Trade update: Trade account registers a surplus of R9.89bn in the first four months of the year
The trade account remained in surplus in April, at R5.08bn, compared to a surplus of R11.28bn in March.
The compression in the April trade surplus, relative to March, was underpinned by a 9.2% m/m contraction in exports that exceeded the 3.4% m/m contraction in imports.
Taking into account the latest data reflects a cumulative trade surplus of R9.89bn in the first four months of the year, which contrasts with the R26.39bn deficit registered in the same period of 2016. In the January to April 2017 period, exports rose 6.4% y/y to reach R360.27bn whilst imports fell by 4.0% y/y to R350.38bn.
Details of the trade data show that commodity price increases have contributed to the improvement in trade dynamics. In particular, the value of exports of mineral products and precious metals rose by 43.3% y/y and 11.2% y/y respectively, in the first four months of the year.
In terms of the manufacturing industry, exports of vehicles fell 12.5% y/y and machinery and durable goods exports decreased 16.0% y/y during January - April. This would suggest that the local manufacturing industry is not fully benefiting from the improvement in aggregate global demand, with global economic activity indicators picking up in H2.16 and into Q1.17.
On the import front, in the year to date, the value of vegetable product imports fell 26.2% y/y following a substantial increase of 37.9% y/y in 2016. This is likely linked to the dissipation of drought conditions in most of the country. Machinery imports contracted by 15.4% y/y, reflecting the weak domestic investment climate.
The improvement in the trade account is expected to be sustained this year. GDP growth is forecast at a subdued 0.8% y/y, as consumption and investment demand remain muted and suppress import growth.
The comparative strengthening bias in SA’s export growth is likely to remain intact if expectations of a sustained moderate lift in global growth and global trade momentum materialise. Specifically, the major international authorities project a synchronised (across advanced economies and emerging markets) economic lift in global growth.