Following yesterday’s Heritage Day celebrations, it’s back to reality today with the July edition of the SARB’s leading indicator the day’s only local data release. The index is a useful backup tool for estimating shifts in South Africa’s economic cycles. According to the SARB, five of the seven available time series components reported decreases in June. Fewer ‘approved residential building plans’ and a narrower ‘interest rate spread’ drove June’s slight decline. The only positive contributors to June’s indicator were an increase in the growth rate of ‘M1 real money supply’ and ‘new passenger vehicles’ sold. The July edition of the indicator will be monitored to gauge an emerging improvement in business conditions as observed in other data releases. Increased consumer and business confidence and the ongoing suspension of load-shedding should lead to an improved print today.
On the news front, President Ramaphosa led a large government delegation to the UN, aimed at garnering support for South Africa’s reform initiatives and promoting the Government of National Unity (GNU). A key objective of the visit was to engage with business leaders in an effort to attract foreign investment to South Africa. In particular, Ramaphosa sought backing for South Africa’s Just Energy Transition and the National Health Insurance (NHI). His constructive message contributed to raising international expectations of the government, a positive development that could lead to greater interest and oversight from foreign investors and nations. However, while it is encouraging that the GNU has made a promising start, maintaining momentum is critical for continued success. To achieve this, attracting foreign investment is essential, with investors looking for stability and an environment conducive to growth.