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IOL News
5 days ago
- Business
- IOL News
Manufacturing output sees slight uptick in May, but economists raise concerns
Nicolai Claassen, director of industry statistics at Stats SA, said the metals and machinery division was the largest positive contributor, expanding by 4.3% year-on-year and pushing overall growth higher by 0.9 of the percentage point. Image: EPA In a tentative sign of resilience, South Africa's manufacturing sector saw a 0.5% increase in production in May when compared to the same month a year earlier following six consecutive months of year-on-year decline. This reading, released by Statistics South Africa (Stats SA) on Thursday, highlights a delicate turnaround following a tumultuous April which witnessed a significant production revised slump of 6.4% year-on-year. Nicolai Claassen, director of industry statistics at Stats SA, said five of the 10 manufacturing divisions recorded upward growth. Claasen said the metals and machinery division was the largest positive contributor, expanding by 4.3% year-on-year and pushing overall growth higher by 0.9 of the percentage point. "Glass and non-metallic metal products, wood paper printing and publishing, textiles and clothing, and communication and professional equipment also registered a positive month," Claasen said. "On the downside, five divisions were weaker in May. These were electrical machinery, the automotive division, petroleum, chemical, rubber, and plastic products, food and beverages, and furniture and other manufacturing not elsewhere classified." Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The surprise rebound comes as South Africa faces tough trading conditions ahead after the Trump Administration imposed a 30% tariff on all products imported from South Africa, which is likely to result will be fewer exports, slower production, and inevitable job losses in the country. Neil Roets, CEO of Debt Rescue, said tariffs of this magnitude will disrupt supply chains and shrink order volumes, placing immense pressure on these already fragile industries. "From production to packaging and distribution, these sectors depend on stable global demand to support thousands of jobs. Tariffs of this magnitude will disrupt supply chains and shrink order volumes, placing immense pressure on these already fragile industries," Roets said. "The manufacturing and agricultural sectors were expected to support growth and job creation in 2025, but the US tariffs could put that recovery on hold. Investor confidence may also weaken, and business expansion plans could be delayed or cancelled." On a monthly basis, seasonally adjusted manufacturing production increased by 2% in May compared with April, representing the strongest month-on-month rise since July 2024 when production also grew by 2%. Professor Waldo Krugell, an economist at the North West University, said it was tricky to know how to put the slight improvement in output in May into context. 'The PMI numbers have been depressed and a year-on-year improvement of 0.5% is rather flat. At least it is the second month of positive month-on-month changes.' Meanwhile, Investec economist, Lara Hodes noted the modest increase in manufacturing output 'came ahead of consensus expectations' that predicted a further decline of 1.4%. Supportive of the mixed messages, history reveals that business activity has been subdued, continuing a grim pattern reflected in the seasonally adjusted ABSA Purchasing Managers' Index (PMI) which remained in contractionary territory for a seventh consecutive month. Hodes said the latest PMI results indicated that business conditions were still strained, with lower demand driving a decline in indices for business activity and new sales orders. 'The business activity and new sales orders' indices remained subdued, well below 50, while the suppliers' delivery index fell notably from 56.6 to 49.0. According to the BER, survey respondents' comments imply that the decrease was driven by lower demand,' she said. Despite these challenges, Hodes said there were hints of stability and improvement. 'Advance indications provided by June's PMI release show that while manufacturing sector conditions remained subdued during the month they did pick up modestly, with global manufacturing conditions also improving somewhat.' Nkosiphindile Shange, an economist at the Bureau for Economic Research, described the 0.5% increase as a "modest but meaningful shift," highlighting that it marks the first year-on-year growth in 2025. Shange said analysts had expected a continuation of declines, forecasting anything from -1.5% to -0.5% production declines, but also noted that the sector was still facing subdued domestic and global demand and has excess capacity. "This is the first year-on-year growth in production in 2025. The latest data is a welcomed development for the South African economy even if it doesn't signal a full recovery," he said. "Despite load shedding risks, weak demand, global trade uncertainty, and logistical issues, manufacturers still managed to improve output; the sector is very resilient. It shows capacity for adaptation and recovery even under stressful conditions." BUSINESS REPORT
Business Recorder
6 days ago
- Business
- Business Recorder
Banks and miners lead Australian shares higher; Trump broadens trade war
Australian shares tracked Wall Street higher on Thursday with banks and miners leading the gain, while US President Donald Trump announced tariffs on seven countries after earlier this week imposing 25% tariffs on Japan and other trade partners. The S&P/ASX 200 index rose 0.6% to 8,587.70 by 0038 GMT. The benchmark ended 0.6% lower on Wednesday. Wall Street ended higher overnight, lifted by the tech-heavy Nasdaq as Nvidia briefly touched a $4 trillion valuation. 'The market is taking lead from Wall Street's rebound overnight where investors are shrugging off the tariff volatility to buy into growth and undervalued sectors of the market,' said Grady Wulff, a senior market analyst at Bell Direct. Meanwhile, minutes of the Federal Reserve's mid-June meeting fuelled hopes that inflation pressures from Trump's tariffs would not derail interest rate cuts this year. Trump said on social media that more tariff letters to other countries would drop later on Wednesday, but gave no details. Australia faces a 10% 'baseline' tariff — the minimum rate imposed on all US trading partners. Financials led gains on the benchmark index, rising 0.7%. The 'Big Four' banks were up between 0.4% and 1%. Gold stocks jumped 1.6% after a sharp drop on Wednesday, as gold prices inched higher. Evolution Mining and Genesis Minerals were up 2.2% and 1.4%, respectively. Mining stocks advanced 0.9% on the back of strong iron ore prices. BHP was up 0.3%, while Rio Tinto and Fortescue gained 0.7% and 1.5%, respectively. Energy stocks were up 0.5%. Oil and gas firm Woodside Energy rose 0.5%, while Santos advanced 0.7%. Technology stocks tracked their overseas peers higher and were last up 0.6%. NEXTDC climbed 1%, while Block Inc's Australia-listed shares advanced 2.2%. New Zealand's benchmark S&P/NZX 50 index rose 0.1% to 12,781.52, a day after the central bank held interest rates steady at 3.25%.
Fibre2Fashion
06-06-2025
- Business
- Fibre2Fashion
UK economy to grow 1.1% in 2025 & 1.2% in 2026: BCC
The UK economy is expected to grow by 1.1 per cent this year, according to the British Chambers of Commerce's (BCC) quarterly economic forecast. The previous forecast expected a growth of 0.9 per cent. Better-than-expected business investment in the first quarter this year (Q1) is forecast to boost gross domestic product (GDP), but the economy will remain sluggish, it said. Increased government spending is another contributor to growth. GDP is expected to rise in 2026 to 1.2 per cent, but that is slightly down from the last forecast (1.4 per cent). Growth in 2027 is forecast to be 1.5 per cent. The UK economy is expected to grow by 1.1 per cent in 2025, the British Chambers of Commerce projected. GDP is expected to rise to 1.2 per cent in 2026 and to 1.5 per cent in 2027. The UK manufacturing sector is expected to grow by 0.5 per cent this year. CPI inflation is forecast to be higher this year, reaching 3.2 per cent by Q4 2025 and unemployment is expected to be 4.6 per cent. The UK manufacturing sector is expected to grow by 0.5 per cent this year, revised up from a decline of 0.2 per cent in the previous forecast. With businesses facing increased cost pressures, consumer price index-based (CPI) inflation is forecast to be higher this year, reaching 3.2 per cent by Q4 2025 (up from 2.8 per cent in the Q1 forecast). It is then expected to fall to 2.2 per cent by the end of 2026 and 2 per cent in Q4 2027. Unemployment is expected to be 4.6 per cent throughout 2025, with the increase in national insurance contributions likely to slow hiring intentions. Business investment across 2025 is projected to be 4.8 per cent—a significant upgrade from 0.6 per cent in the last forecast. However, investment is expected to be focused in a smaller number of sectors like manufacturing and financial services. BCC survey data has consistently found that the majority of small and medium enterprises (SMEs) are not increasing their investment, with tax increases acting as a major barrier. After some recent positive trade developments, with the United States , EU and India, UK exports are projected to grow by 2 per cent in 2025, (an upward revision from a 0.5-per cent drop in the last forecast), 2.1 per cent in 2026 and 2.4 per cent in 2027. However, UK imports are expected to grow by 3 per cent this year (compared with 0 per cent in the previous forecast), before falling to 1.2 per cent in 2026, and then 2.6 per cent in 2027. This means net trade continues to contract, with figures of minus 1.2 per cent in 2025, minus 1.1 per cent in 2026 and minus 1.2 per cent in 2027. However, major uncertainties remain on the global trade outlook due to the potential for short term changes in policy leading to behavioural shifts among importers and exporters to manage the changes, BCC said in a release. Average earnings in the country are expected to remain significantly above inflation this year, reaching 4.2 per cent by the end of Q4, putting further cost pressures on businesses. The forecast suggests annual wage growth will remain elevated in the coming years, falling only very gradually to 4.1 per cent in 2026 and 4 per cent in 2027. Fibre2Fashion News Desk (DS)
Fibre2Fashion
28-05-2025
- Business
- Fibre2Fashion
Germany's economic expectations climb, but growth fears persist: Gfk
Consumer sentiment in Germany presents a mixed outlook for May, with noticeable improvements in economic and income expectations. However, the willingness to buy has declined slightly, while the inclination to save has risen again. The consumer climate indicator forecasts a moderate increase of 0.9 points to -19.9 for June 2025, up from a revised -20.8 in May, according to the GfK Consumer Climate powered by NIM, jointly released by NIQ and the Nuremberg Institute for Market Decisions (NIM). Both the slight decline in the willingness to buy and the increasing willingness to save are currently having a dampening effect on consumer climate and are preventing the noticeable growth in income and economic prospects from having a stronger impact on the consumer climate this month. The savings indicator rises by 1.6 points in May—following a significant decline in the previous month- and climbs to 10 points, as per the report. Consumer sentiment in Germany remains mixed in May, with income and economic expectations rising, but willingness to buy falling and saving increasing. The consumer climate index improved slightly to -19.9, the highest since November 2024. Concerns over trade policies, market volatility, and stagnating growth continue to dampen sentiment. However, there is no economic growth forecast for 2025. The consumer climate has risen for the third consecutive month, though the increase is moderate at 0.9 points. At -19.9 points, it has reached its highest level since November 2024, when it stood at -18.4 points. 'The level of consumer sentiment remains extremely low, and consumer uncertainty remains high,' said Rolf Burkl, consumer expert at the NIM . 'The unpredictable customs and trade policy of the US government, turbulence on the stock markets and fears of a third consecutive year of stagnation are reasons why the consumer climate remains weak. In view of the general economic situation, people seem to think it advisable to save.' Consumers' income expectations increase noticeably in May. The indicator gains 6.1 points, climbing to 10.4 points. This is the highest value since October 2024—when 13.7 points were measured. Compared to the same period last year, however, there was a small drop of 2.1 points. Consumers in Germany are increasingly optimistic about their income due to favourable wage agreements and easing inflation, which stood at 2.1 per cent in April. However, this has not translated into greater willingness to buy, which fell to -6.4 points amid concerns over trade policies and rising unemployment. Meanwhile, economic expectations rose for the fourth straight month, reaching 13.1 points—it's highest since April 2023. Despite this optimism, the German Council of Economic Experts forecasts no growth in 2025, with a modest 1 per cent rebound expected in 2026. The findings are drawn from the GfK Consumer Climate powered study, based on approximately 2,000 monthly consumer interviews carried out on behalf of the European Commission. Fibre2Fashion News Desk (SG)
Yahoo
16-05-2025
- Business
- Yahoo
WEN Q1 Earnings Call: Wendy's Maintains Guidance Amidst Consumer Headwinds and Strategic Initiatives
Fast-food chain Wendy's (NASDAQ:WEN) met Wall Street's revenue expectations in Q1 CY2025, but sales fell by 2.1% year on year to $523.5 million. Its non-GAAP profit of $0.20 per share was in line with analysts' consensus estimates. Is now the time to buy WEN? Find out in our full research report (it's free). Revenue: $523.5 million vs analyst estimates of $524.9 million (2.1% year-on-year decline, in line) Adjusted EPS: $0.20 vs analyst estimates of $0.20 (in line) Adjusted EBITDA: $124.5 million vs analyst estimates of $122.5 million (23.8% margin, 1.7% beat) Management lowered its full-year Adjusted EPS guidance to $0.95 at the midpoint, a 5% decrease Operating Margin: 15.9%, in line with the same quarter last year Free Cash Flow Margin: 12.9%, up from 10.5% in the same quarter last year Locations: 7,308 at quarter end, up from 7,248 in the same quarter last year Same-Store Sales fell 2.1% year on year (0.9% in the same quarter last year) Market Capitalization: $2.3 billion Wendy's leadership attributed its first quarter results to a combination of challenging consumer conditions, adverse winter weather, and the impact of new promotional efforts. CEO Kirk Tanner highlighted that while global same-store sales fell, the company maintained U.S. traffic and dollar share, driven by product innovation such as the Thin Mint Frosty and ongoing emphasis on value. He pointed to international growth, notably in Canada and new markets like Australia, as a bright spot in the quarter's performance. Looking ahead, management lowered its full-year adjusted EPS guidance, citing ongoing uncertainty in consumer demand and broader industry traffic softness. Tanner emphasized that Wendy's is prioritizing operational improvements, increased digital engagement, and menu innovation to offset these pressures. He explained, 'We are focused on controlling what we can control and adapting to the current environment through both value and innovation,' while reiterating the company's commitment to net unit growth and expanded international presence. Wendy's first quarter was influenced by macroeconomic pressures and strategic programming, with management focusing on menu innovation and operational improvements to drive future growth and maintain competitiveness. Menu Innovation and Collaborations: The launch of new Frosty flavors and collaborations with brands such as Girl Scouts and Takis helped boost customer traffic temporarily, with further product tie-ins planned for summer and fall. Operational Excellence Initiatives: The company rolled out new training programs, doubled in-restaurant field visits, and introduced operational tools like menu item labels and delivery scales to improve order accuracy and customer satisfaction. Technology Investments: Management accelerated the deployment of digital menu boards and AI-based order-taking, aiming to enhance personalization and drive higher digital sales, which reached over 20% of total sales for the first time. International Expansion: Over 60% of new restaurant openings occurred in international markets, with record growth in Canada and early success in Australia, reinforcing Wendy's strategy to expand its global footprint. Franchisee Support and Benchmarking: A new system for collecting and benchmarking franchisee financials at the restaurant level was introduced, intended to drive operational best practices and improve franchisee profitability. Management expects continued consumer uncertainty to impact sales, but believes menu innovation, technology investments, and international expansion will support gradual improvement through the year. Customer Value and Promotions: The 100 Days of Summer campaign and ongoing value offerings are designed to attract price-sensitive consumers and drive frequency, especially as industry-wide QSR traffic remains pressured. Digital and Operational Enhancements: Expansion of digital ordering, loyalty features, and AI-driven tools is expected to improve efficiency and customer engagement, contributing to higher average order values and productivity. International Growth Focus: The pipeline of new international units and development agreements in markets such as Mexico, Chile, and Australia is central to Wendy's long-term growth strategy, providing diversification from U.S. market headwinds. Jeffrey Bernstein (Barclays): Pressed on whether Wendy's value platform needs to be refreshed in light of consumer pressure; CEO Kirk Tanner stressed a balanced approach with ongoing innovation and weekly value deals. David Palmer (Evercore ISI): Asked where the biggest improvements in customer experience are expected; Tanner cited investments in order accuracy and hospitality through operational tools and field resources. Dennis Geiger (UBS): Inquired about franchisee demand and the development pipeline; Tanner expressed confidence in both international and domestic growth, emphasizing ongoing pipeline visibility beyond 2025. Jon Tower (Citi): Sought details on Q1's sales softness and income cohort trends; management noted broad-based pressure, especially among households earning below $75,000, while reaffirming investment in growth initiatives. Sara Senatore (Bank of America): Questioned the impact of reduced advertising spend; CFO Ken Cook said share was maintained and emphasized a focus on in-restaurant experience to drive frequency. In the coming quarters, the StockStory team will be monitoring (1) the effectiveness of Wendy's 100 Days of Summer campaign in driving guest traffic and frequency, (2) execution of international expansion and new unit openings, and (3) progress in digital engagement and operational improvements such as AI order-taking and accuracy tools. We will also track developments in the competitive landscape and consumer spending patterns, which could influence near-term performance. Wendy's currently trades at a forward P/E ratio of 11.8×. Is the company at an inflection point that warrants a buy or sell? Find out in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
