RESERVE Bank governor Tito Mboweni will hold centre stage this week when he announces the monetary policy committee's decision on interest rates.

Economists agree that it will be a tough decision, but most expect the committee to keep its repo rate steady at 7% on Thursday.

Although the focus will be on the Bank, there will be plenty of economic data and confidence ind exes released this week to give an indication of the health of the South African economy.

Statistics SA will release October manufacturing production figures tomorrow, followed by September retail trade sales on Thursday.

The manufacturing figures will be closely watched for any further signs of a slowdown suggested by recent readings of the Investec purchasing managers index.

The index, a measure of manufacturing activity, fell for a second consecutive month in November, dropping to 51,6 points, as the strong rand and a slowdown in the global economy put the brakes on manufacturing production. The sector has only this year emerged from recession.

Manufacturing production rose 6,1% year on year in September, but there were signs that underlying momentum in the sector could be slowing down.

Standard Bank economists said on Friday that although purchasing managers' expectations of business conditions ha d dropped, the sector was "still expected to grow, driven mainly by domestic demand".

Production is likely to increase 0,2% during the month, and 6,8% on a year-on-year basis, says Standard Bank. The rand has gained almost 50% in the past two years, eroding exports' competitiveness .

A survey by the University of Stellenbosch's Bureau for Economic Research, released last week, says almost 40% of manufacturers have stopped exporting . Exporters say a R7,70 level against the dollar would allow for competitive export ing.

The rand surged to a six-year high of R5,70 against the dollar last week, boosted by a slump in the greenback, which fell to a n all-time low against the euro at $1,3239.

A manufacturing slowdown could hinder growth, with manufacturing contributing 16,4% to SA's overall output. Gross domestic product rose at an annualised rate of 5,6% in the third quarter, the strongest growth in more than eight years, boosted by 5% growth in manufacturing.

Despite the struggling export sector, strong domestic demand fuelled by low interest rates has helped to support manufacturing production this year.

With consumers already in the swing of the year-end shopping spree, tomorrow's release of consumer confidence figures will be keenly watched .

The index, compiled by the Bureau for Economic Research and First National Bank , soared to record highs earlier this year, boosted by low inflation, falling interest rates and a n increase in disposable income.

The third-quarter confidence survey also showed stronger sentiment among black and low-income consumers . Strong consumer sentiment should sustain spending this quarter, with evidence of this likely to come in Thursday's release of retail trade figures.

Retail sales surged 10,6% year on year in August, with all signs pointing to firm sales growth in September as well.

"With the Christmas shopping season upon us, and the likelihood of no changes to the financial scene, we expect strong retail data for the remainder of the year," sa ys Standard Bank.

Efficient Group economists Dawie Roodt and Nico Kelder said in a report on Friday that the strong rand was also boosting consumer spending on imported goods.

"The stronger currency is reflected in items that recorded the strongest rates of expansion (such as) audio appliances, footwear and television sets stuff that is imported ," the economists said.

Market participants will also keep a close watch on tomorrow's data on foreign exchange reserves for any indication that the Bank has stepped up dollar purchases.

The Bank has been steadily buying dollars to add to reserves, with October figures putting gross reserves at a record $13bn.

Economists expect the Bank to have increased reserves in November, taking advantage of the weaker dollar.