Exports strong despite labour unrest

Exports increased and imports dipped in June, preventing the gaping trade deficit from ballooning further.

The deficit narrowed to R190-million from R7.4-billion in May, according to the South African Revenue Service. The median estimate of 13 economists surveyed by Bloomberg was for a shortfall of R6.3-billion.

It was feared the five-month strike on platinum mines would seriously affect total exports. But the numbers showed the opposite.

Barclays Capital found the 9.8% month-on-month rise in the exports of precious metals (including platinum group metals) and gemstones, after a contraction in May, "surprising".

"We had expected this to fall significantly further in June . given anecdotal reports and briefings from the affected companies that they had exhausted stockpiles of PGMs [platinum group metals] to support continued export sales," said Barclays Capital.

Increases in the shipping of vehicles and vegetable products further boosted exports.

Though trade data can be volatile from month to month, Nedbank's economists said global conditions have continued to improve and the rand exchange rate is favourable for exports.

Compared with a year ago total exports are up by more than 4%, while total imports rose by 3.1%.

"But local export performance is unlikely to rise strongly as long as production disruptions in key sectors persist."

South Africans' appetite for machinery and appliances is also strong. In June we imported R10.3-billion more gadgets and white goods than we exported. This includes the equipment used in the construction of infrastructure by state-owned enterprises.

The machinery and appliances category is the biggest contributor to the trade deficit, accounting for a shortfall of more than R70-billion so far this year.

Asia - and especially China - still accounts for most of South Africa's imports, followed by Europe and the rest of Africa.

South African exports mostly find their way to Africa, building up a trade surplus of nearly R73-billion this year. Botswana, Lesotho, Namibia and Swaziland are worth R50-billion alone.