SA CUR decreased by 1pps 75.2% which is the lowest level since October 2020 (1Q20: 75.6%, 2Q20: 63.5, Historical Average: 76%).
In yearly comparison, all sub- indices recorded increases. On the other hand, the recent monthly drop on capital goods CUR, which decreased to lowest level since June 2020, deserved attention.
Unadjusted CUR decreased by 0.6pps MoM, but increased by 12.7pps to 75.3%. Despite the strong positive basis YoY recovery trend lost momentum.
CUR of consumption and capital goods couldn’t reach pre-pandemic level yet whereas intermediate goods’ CUR continued to gave a better Outlook.
4 out of 23 sub-sectors of manufacturing sector posted negative annual changes. The highest declines belong to motor vehicles, repair-installment of machinery and furniture.
Despite SA RSCI decreased by 0.3% for the second month in a row to 107.1, it continued to stay at the optimistic area. (1Q21: 109.3, 2Q20: 75.2, Historical Average: 103.2).
Confidence indices can take value between 0 and 200. It indicates an optimistic outlook when the indices are above 100, but it indicates a pessimistic outlook when they are below 100 (and stable outlook when the indices are equal to 100).
Orders, stocks and investment recorded monthly decreases despite the rise on general
situation. However, general situation and orders continued to remain below of 100.
Optimistic outlook continues. On the other hand, total orders recorded 7th drop in last 8 months whereas export orders gave a better Outlook. We should also note that the expectation on volume of output lost steam recently.
Service sector confidence index recorded the 2nd monthly drop after hitting the highest level since July 2012 in March but continued to stay at the optimistic area.
In May, all three current Outlook indices recorded decreases. Business situation index declined to pessimistic area in May after 4 months later. To recall, employment index decreased below of the critical level of 100 last month. Hence, only demand index
continued to stay just above of 100.
Only the expectations on the price levels decreased in monthly basis. Especially, the jump on the demand expectations deserved attention.
In May, most of the firms in the services sector said there was no factor which limit activities. On the other hand, insufficient demand, other factors and financial
constraints were shown as the main factors limiting activities.
A 56,2% of the firms in services sector said that they could increase their activities by 21% in the case of increased demand without any change in their current resources.
Retail-trade sector confidence recorded the 2nd monthly drop and decreased to lowest level since October 2020 whereas it continued to stay just above of 100 for the 7th month in a row.
Volume of stocks decreased in a slower pace than the drop of business activity and sales.
All expectations remained at optimistic side. Expectations on orders to suppliers recorded monthly drop for the 3rd month but stayed just above the level of 100.
In May, most of the firms in the retail trade sector said there was no factor which limit activities. On the other hand, insufficient demand, other factors and financial constraints were shown as the main factors limiting activities..
A 65,9% of the firms in retail trade sector said that they could increase their activities by 15,5% in the case of increased demand without any change in their current resources..
Construction sector confidence index recorded first monthly increase from the lowest level since June 2020 after 5-month long negative trend.
Building activity and current order books continued to decrease the third consecutive month.
Downward trend on the expectations of employment and prices halted.
In May, most of the firms in the construction sector said there was no factor which limit activities. On the other hand, insufficient demand, other factors and financial constraints were shown as the main factors limiting activities..
A 52,5% of the firms in construction sector said that they could increase their activities by 19,8% in the case of increased demand without any change in their current resources.
Source: Y. F. Securities Research