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RSA: The Anomalous Business Upswing

  09/15/10 03:22, by Len, Categories: Announcements, Personal Financial Management, Economics Commentary, Financial Markets, Financial Articles

Source - Article by Cees Bruggemans

Profile: Cees Bruggemans is Chief Economist of First National Bank.

We are told things are ‘unusually uncertain’. That certainly applies to some countries, and to some sectors. But how unusually uncertain is South Africa’s new business upswing really? Is there reason for worry? And what policy action may we still expect, if any? No two business cycles are ever quite the same. Their upswings, peaks, downswings and troughs all differ, mostly minutely but sometimes more than average, in length, amplitude and rate of change. Any deviations from the known ‘norm’ are mostly nothing major. But given all this talk about our recent recession, its abruptness and depth, and an upswing that feels fragile and mediocre, is there reason for concern that times remain unusually unsettled?

I detect at least six anomalies in the current upswing, not all of which may be recognized as such. It leads to conflicting implications. The overall impression is one of ‘normalcy’ (itself apparently a surprise), with some sector upside bias and some sector downside bias, with if anything the downside bias risking being overwhelmed by upside events.

Anomaly One: Overall RSA business cycle remains ‘normal’
Anomaly Two: Manufacturing is having a normal cycle.
Anomaly Three: Motor Trade off the charts
Anomaly Four: Prolonged building slump
Anomaly Five: Credit gone crazy and now shaking out
Anomaly Six: Retail surprises with its vitality

Read the full Article here.

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