The Year 2012 May Be Better Than We Expect

I know that the realists amongst us are generally against the idea of a "New Years Resolution". They pride themselves for not making any such resolutions because to them the 1st of January is just another day in the calendar and a continuation of this long drawn-out thing called life, so who cares about the first day of the year. 

 

However, it crossed my mind whilst enjoying the company of friends in early hours of 1 January 2012 that, irrespective of how smart you may want to sound, the first day of anything, is something human beings tend to treasure. Think about the first day of your life, the first day of school, the first day of University, the first day you saw her and the first day of 'the rest of your lives together'.

So, its human nature to attach some importance to the 1st day of a year. For many it has meaning. It provides an opportunity to make a fresh start. It's as if the universe has restarted the clock. It's as if you have just finished the race of 2011. Checked your distance. Checked your achievements. Took a breath. And now you get to start another race. The race of 2012.

Irrespective of whether 2011 was good or bad to you, the 1st January 2012 is an opportunity to give this thing we call life another shot.

Today, I came across an article entitled "If you've got a job, be happy" by Maya Fischer-French which got me thinking about what 2012 holds for South Africans in light of the turmoil in Europe, the growth slowdown in Asia, and many other domestic factors.

This article gave some evidence to the "gut-feel" I have that 2012 may be a better year than we all expect. Economically that is. Mangaung remains a topic for another day!

Enjoy.

"IF YOU'VE GOT A JOB, BE HAPPY"

by MAYA FISHER-FRENCH - 

20 Jan 2012

"If you have a job and some assets, you are better off than you realise. Indicators of economic activity released over the past few months suggest that our economy is starting to find its footing and 2012 may be better than we expect, despite the general pessimism about the eurozone.

Bond originator ooba recorded a 33% increase in the value of bonds approved in November, the highest recorded since May 2008 before the global financial meltdown.

The FNB estate agent survey shows that more first-time buyers are entering the market. After collapsing to 15% of total buyers in 2008, the percentage of first-time buyers rose from 17% in 2010 to 23% in 2011. This is the highest percentage of first-time buyers since 2005. Affordability affects this market the most as they require a significant deposit and find it more challenging to get credit without a track record.

On the upside, retail sales growth has continued to surprise economists and the good news is that we are doing it without taking on additional debt. Credit extension figures for households are the weakest ever recorded post-recession and, according to FNB's household debt-service risk index, the vulnerability of the country's household sector when it comes to being able to service its debt appears to be diminishing. The index shows that, although household debt is not at a comfortable level, it is moving in the right direction.

Revenue collection figures at the end of November showed that government revenue collection exceeded expectations, with value-added tax (VAT) revenue up 26%, excise duties up 37% and a 14% increase in personal income tax. VAT and excise duties are good indicators of spending, and higher personal tax collection suggests either higher wages or more jobs. Either way there is more money to spend.

Although it may not feel like it, South African consumers are, on aggregate, substantially better off than they were a decade ago. The issue, though, is that the wealth effect is not yet broad-based and remains limited to those who are employed and have assets.

Reserve Bank figures show that household net wealth clocked in at R6.5-trillion at the end of last year, increasing by 9.7% on the previous year. This is a record level despite the recent global economic turmoil.

Over the past seven years, household wealth increased by slightly more than R3-trillion, an average annual growth rate of 12.9%. Most of this is in the form of financial assets (R4.6-trillion), including bank deposits, pension funds and unit trusts. Residential property makes up R1.6-trillion.

South Africa's household debt makes up R1.2-trillion, which leaves us with a net asset base of R5.3-trillion. According to Stanlib economist Kevin Lings, although some homeowners may be struggling to keep up their bond instalments, on aggregate the value of residential property was equal to 210% of the amount owed on these properties."