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Producer price inflation for domestic output spiked 7.4% in June 2011 from the comparable period in 2010, Statistics South Africa announced on Thursday.

The increase was due to an annual surge in PPI in the electricity, mining and quarrying, and food manufacturing sectors in June 2011 from May 2011.

This was counteracted by a decrease in annual PPI for agriculture and basic metals for the same period.

The biggest change in PPI during this time was in the mining and quarrying and basic metals sectors, which increased 3% and decreased 8.7% respectively.

Month-to-month, domestic output PPI increased 4.4% from May 2011 to June 2011.

Inflation pressures
The figures indicate a moderate increase in the cost of producing goods domestically; however an economist felt the increase not to be a great threat to inflation or to provide impetus for a repo rate increase by the South African Reserve Bank (SARB).

“It paints a very bearish view for inflation which we see remaining above the reserve bank’s target band of 3% to 6% throughout 2012,” Monale Ratsoma, chief economist at Thebe Securities, told the Mail & Guardian.

The SARB’s monetary policy committee has left rates unchanged at 5.5% at its last four policy meetings, following a two-year cycle of lowering which led to 6.5% being lopped off the figure.

The level is the lowest since 1962.

Although inflation is seen to be in an upward cycle moving towards SARB’s target ceiling of 6%, Ratsoma was candid about the possibility of an imminent repo rate increase by SARB.

“If inflation remains below 7% I would not imagine a rise in interest rates before the middle of next year,” he said. Read more…

On a ten point scale representing how much a respondent respects a particular institution, Canadian small businesses scored 8.2. Only farming scored higher, at 8.7 and ironically, most of those are small businesses.

The Canadian public clearly has more respect for small businesses than for the education system/schools and the health care system (both scored 7), large companies and banks (5.6), government (5.3) or labour unions (5.1), which came in last.

Even more telling, the research report by the Canadian Federation of Independent Business (CFIB) goes on to say, “An overwhelming 94 percent (of those surveyed) said they admire entrepreneurs, while 92 per cent would approve of their child or immediate family member starting their own business.”

So if there’s all that respect for entrepreneurs out there, why aren’t more Canadians starting their own small businesses?

Read more…

South Africa is aiming to increase the number of foreign tourist arrivals from seven-million in 2009 to 15-million by 2020, said Minister of Tourism Marthinus van Schalkwyk in a speech prepared for delivery on Monday at the South African Association for the Conference Industry meeting in Somerset West near Cape Town.

He added that it was also his department’s intention to lift tourism’s total contribution to the economy from R189-billion in 2009 to R499-billion by 2020 and the number of domestic tourists from 14.6-million in 2009 to 18-million by 2020 and to create 225 000 new jobs by 2020.

“SA’s status as a premier global leisure tourism destination is now firmly entrenched.

“The year 2010 was, in this regard, an exceptionally good one. On the back of the 2010 Fifa World Cup, our global visibility reached unprecedented levels. We have demonstrated that we have the capabilities; the welcoming culture; and the authentic offerings that the world’s ever more discerning travellers demand. Read more…

The South African Reserve Bank has left the repo rate unchanged at 5.5%, governor Gill Marcus said on Thursday.

The prime rate would stay at 9%.

This was in line with market expectations with all 24 economists surveyed by Bloomberg agreeing the rate would be held steady.

It was the fourth consecutive meeting where it remained unchanged, after it was reduced by 650 basis points between mid-2008 and December 2010. The decision keeps the rate at its lowest level in over 30 years.

The target inflation range is between 3% and 6%. Read more…

Negotiations on a sweeping deficit-reduction deal collapsed in acrimony on Friday as US House Speaker John Boehner pulled out of talks with President Barack Obama, dealing a blow to efforts to avert a looming debt default.

With the deadline just 11 days away for raising the federal government’s borrowing limit, a stern-faced Obama expressed deep frustration with Boehner for walking away and demanded that he and other congressional leaders meet him at the White House on Saturday.

Boehner said he could not overcome disputes with Obama over taxes and entitlement spending and said he would now try to hammer out a deal with the Democratic-controlled Senate to increase the country’s $14.3-trillion debt limit by August 2.

“We have run out of time,” Obama said at a hastily called news conference, saying it was “hard to understand why Speaker Boehner would walk away from this kind of deal”.

A deep divide over tax revenue derailed the latest negotiations, ending an ambitious bid to craft a $3-trillion deficit-cutting plan that now seems beyond reach.

The world’s biggest economy will run out of money to pay its bills without a deal by the August deadline. Read more…

AP Photo Medco’s automated pharmacy is shown in Willingboro, N.J. Express Scripts Inc. and Medco Health Solutions Inc., plan to combine in a $29.1 billion deal

The top two U.S. companies managing prescription drug benefits are uniting in a $29.1 billion deal they say will help achieve key goals of the health care overhaul: reining in costs and improving patients’ health.

Express Scripts Inc. announced an agreement Thursday to buy larger rival Medco Health Solutions Inc. Together, they would handle the prescriptions of about 135 million people, more than one in three Americans.

That will give them even more clout in demanding discounts from drugmakers, who are dealing with falling or stagnant revenue as an unprecedented number of blockbuster drugs taken daily by millions is getting cheaper generic competition.

Pharmacy benefit managers process mail-order prescriptions and handle bills for prescriptions filled at retail pharmacies, acting as middlemen between employers offering prescription drug benefits and drugmakers.

They also hold down costs by extracting discounts and rebates from drugmakers, using tiered copayments that nudge patients to buy generics or the lowest-cost brand names, and reminding patients to take medicines as scheduled to

limit costly complications.

Together, Express Scripts and Medco handled more than 1.7 billion prescriptions in 2010 and reported almost $110 billion in revenue, although Medco recently lost several contracts covering millions of people.

Read more…