Tuesday, July 12, 2011

South African Macro fundamentals are very impressive

According to the Mpact Management Presentation (pages 50 and 51), which can be found here:

  • Fundamentals of the consumer market continue to improve on the back of growth in GDP and Personal Consumption Expenditure
  • Stable GDP growth outlook
  • Household consumption expenditure supported by recovery in household net wealth, lower debt service costs, strong wage growth and low inflation
  • Consumer confidence remains elevated and consumption growth remains relatively strong
  • Real wage growth
  • Positive correlation between increasing wealth (GDP/capita) and packaging consumption
  • South Africa provides a platform to access other Southern African markets which also present attractive fundamentals
  • Consumer fundamentals and personal consumption expenditure is expected to be underpinned by structural changes in the South African economy including:
    –Fundamental migration of consumers from lower Living Standards Measure (‚LSM‛) to higher LSMs
    –Continued trends of urbanisation
  • LSM Migration: since 2001, have seen a 45% decrease in consumers in LSM 1-3 level, 40% increase in LSM 6-8, and 36% increase in LSM 9-10.

  • SA Urbanisation expected to reach 63% in 2014

Mpact is a recent unbundling from Mondi... details here.