Exports recover as domestic demand shrinks

Manufacturing business confidence has declined to a nine-year low, according to the findings of the latest Bureau for Economic Research survey. Business conditions worsened during the third quarter, with domestic demand in particular surprising on the downside. “Although manufacturers expected these sales and order volumes to decline, the extent of the descent was unexpected,” said BER economist Christelle Grobler. The deterioration in domestic demand appears to have forced a switch to the export market where volumes, although still weak, revealed a relative recovery during the survey quarter. “Moreover, given the more competitive rand exchange rate (on a tradeweighted basis; relative to the same quarter last year), these exporters managed to increase their foreign selling prices significantly,” said Grobler.