We’ve extracted the salient factors that collectively shape the cost structures, demand, and operational environment for the automotive trade in South Africa.
Extracts from the Business Unity South Africa Weekly economic forecast and cargo movements for the week ending 15 November 2023
1. Manufacturing Growth The slight increase in manufacturing production (+0.2% q/q) could signal stability or growth in sectors related to automotive production, though the growth is minimal.
2. Economic Growth Indicators The rise in the BankservAfrica Economic Transactions Index (BETI) suggests improving economic activity, which might support demand in the automotive market.
3. Energy Challenges Eskom’s lower Energy Availability Factor (EAF) indicates ongoing power supply issues. This impacts automotive production due to reliance on stable electricity for manufacturing processes.
4. Renewable Energy Investments Investments in renewable energy and new power plants, such as Teraco’s solar PV plant, may improve energy reliability in the long term, positively influencing the automotive industry’s productivity.
5. Government Collaboration and Investments Stronger cooperation between the government and private sector and significant investments in infrastructure and renewable energy could create a more stable economic environment for automotive trade and manufacturing.
6. Unemployment and Employment Growth While employment grew, the unemployment rate remains high, which might limit consumer spending power in the automotive market.
7. Container Terminal Handling Significantly Up An average of 12,013 TEUs was handled per day, significantly up from 10,176 TEUs last week. There is a projection of an average of 11,302 TEUs per day for next week.
