SEIFSA Welcomes Further Easing Of Inflation For The Month Of January 2019

Johannesburg, 20 February 2018 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the further easing of inflation in January, as indicated by Consumer Price Index (CPI) data released by  Statistics South Africa (StatsSA) today.

The StatsSA data indicate that the annual headline CPI was 4.0 percent in January 2019, down from 4.5 percent in December 2018. The month-on-month movement in the CPI was -0.2 percent in January 2019. This bodes well for businesses operating in the metals and engineering (M&E) sector.

Speaking after the release of the data, SEIFSA Economist Marique Kruger said it was reassuring that the headline inflation now trends below the mid-point of the South African Reserve Bank’s target range of 3 percent to 6 percent, providing a basis for firm consumer demand.

This is a third consecutive decrease in headline inflation from November 2018, which is consistent with a general decrease in petrol prices over the same period.

“The continuous slowdown in prices in January 2019 is encouraging, given its extended implications on higher demand for both the final manufactured goods of the broader manufacturing sector and the intermediate goods of the M&E sector,” said Ms Kruger.

She said core inflation had been trending under 4.5 percent from January last year and it was encouraging to note that core inflation – w which excludes food, non-alcoholic beverages, fuel and energy – was 4.4 percent in January 2019, unchanged from December 2018.

“SEIFSA will continue to monitor the inflation variable because of its derived importance for the M&E cluster of industries and the broader economy. The domestic inflation trend will also be an important consideration, amongst other significant factors, when members of the South African Reserve Bank’s Monetary Policy Committee) meet in March 2019,” Ms Kruger concluded.

SEIFSA is a National Federation representing 23 independent employer Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing fewer than 50 people