As central banks raise rates around the globe to ward off inflation, risks of a recession are rising. Business owners and consumers alike want to know if a recession is coming, when it will arrive, and what the magnitude and length of the slowdown will be.
SpaceKnow data monitors real-time activity on the ground in manufacturing, mining, tourism, retail, logistics, construction, and trade. With this data, our customers can observe production and spending factually and make their own judgments. In this newsletter, we provide an update on South African indicators.
Figure 1 shows that coal processing and production can help to predict electricity production. The SpaceKnow coal processing satellite activity index (SAI) suggests electricity production in South Africa will drop in December and January. Eskom, South Africa’s utility that produces 95% of the electricity, has said that most of the coal-fired power stations need repairs and has announced rolling blackouts.
The most recent available data for the retail sales index for South Africa is in October. The index declined by 0.6% year-over-year in October. Spaceknow data covers the gap from October to today. The Spaceknow Retail Parking Index suggests that retail sales rebounded strongly in December. In figure 2, we look at retail parking data to predict data for the next month.
The construction industry in South Africa has been weak in 2022. Slowing economic conditions in South Africa do not benefit local construction companies, which struggle to get the necessary funding. Most large projects were canceled in the past two years due to a lack of funding and Covid-19. The 2022-2023 Treasury budget increased allocations to infrastructure spending and SpaceKnow will be tracking construction indicators to see if this permeates into the economy.
From figure 2, we can see that GDP from construction has been falling consistently in South Africa since Covid-19 began. The most recent data from SpaceKnow shows that construction fell again in December.
Methane emissions continue to rise. Figure 4 tracks methane emissions from Gauteng, South Africa’s wealthiest state (as ranked by per-capita income).
Conclusions
SpaceKnow data shows weakness in electricity production and construction. Retail sales were strong seasonally in December. Meanwhile, methane emissions have risen steadily, suggesting that the movement to reduce dependence on coal for electricity production will continue.
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