If we record a trade surplus of R3.87-billion for September this year, we can’t be doing that bad as an economy.
According to my good friend Kevin Lings who is an economist at Stanlib,
South Africa’s trade account has improved very noticeably this year, helped initially by a sharp fall-off in imports, but since July there has been some improvement in exports.
In total, SA’s trade account has recorded a surplus of R7.12bn in the last five months (May 2009 to Sep 2009). This compares with a deficit of R21.0bn in the same period during 2008, he says.

Kevin says during September this year, imports fell by 1.7%m/m, but exports increased by a very welcome 12.8%m/m. The increase in exports, which amounted to R5.15bn during the month, was mainly due to a R3.2bn increase in precious metals and stones, an increase of R1.5bn in steel exports and a R0.72bn rise in vehicle exports.

The general improvement in SA exports over the past five months, and especially in September, could reflect some benefit from the pick-up in world trade and world economic activity, in general. This is still Kevin speaking.
He says on the import side (which decreased by R0.7bn in September) oil imports fell by a substantial R2.1bn. A decrease in SA imports is normally associated with an economic downturn. The current trend in SA imports would suggest that the economy remains under pressure, although the rate of deterioration has clearly eased.

In the first nine months of this year, SA imports were down a total of 26.6%year-on-year or R144.8bn, while exports were down 21.9% or R107.1bn.
Over the past 12 months the trade balance has averaged a monthly deficit of only R2.3bn. This average compares with a 2008 average deficit of R5.6bn and R5.7bn in 2007, Kevin says.

“Overall, the decline in SA imports (due to the recession) and modest improvement in exports (helped by some improvement in the global economy) has meant that SA’s trade balance has recorded a very noticeable and welcome improvement over the past 6 months. This improvement is likely to be sustained during the remainder of 2009 and into the early part of 2010,” he says.
Now that’s good news because it means somebody or bodies are buying our stuff.
Since I explained exports and imports to my five year-old son and his teenage sister, he is always selling his toys to his pre-school buddies saying I told him that exports were better than imports.
How would I have known the little bugger would catch on so fast. When I explained it to them I said it is advisable to always sell more than you buy to get rich and eventually wealthy.
Because of that ill-advised lecture my son is selling more, but the problem is that I end up buying more. I think he is ready for a lecture on the stock exchange.

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