Johannesburg - Black spending power has been slowed down by the recession and a big jump in job losses, economists say.
"The trend will continue but really [only] from post-2010, as there will be little growth and wealth creation this year," said Investec Group economist Annabel Bishop.
According to figures from Unisa's Bureau of Market Research, blacks' total contribution to household expenditure in South Africa increased from 38.6% in 1993 to 47.1% in 2008, while that of whites (10.8% of the population in 2008) declined from 48.1% to 40.2% in the same period.
"We [South Africa] went through a long period of economic growth and black empowerment, and the increasing number of black people employed meant there would be an increase in expenditure," said chief economist at Thebe Securities Monale Ratsoma.
In August 2009 FNB said black clients represented 57% of its savings/investment book, compared to whites (28%), Asians (8%) and coloureds (7%).
According to Ratsoma, this does not mean that black people are investing more than other race groups; the numbers merely reflect that black people - 79.3% of the country - form the majority of South Africans.
Job losses hit blacks the most
He said even with poverty and unemployment, government grants which increase and reach more recipients each year enable the jobless to spend money.
Although 2009 figures are not yet available, Ratsoma said: "The recession will have caused a bit of a slump in this trend, but not a complete turnaround."
Previous experience (based on research from 1993 to 2008) showed that recessionary conditions will have slowed the trend, said Standard Bank economist Johan Botha.
There were more than a million job losses in 2009. According to the South African Reserve Bank quarterly bulletin, household consumption expenditure contracted by 4.8% in the second quarter and 5.8% in the third quarter of last year, compared to the same quarters in 2008.
Given that the majority of the South African population is black, Botha thinks the number of black people who have lost jobs would have been very high.
"As soon as the economy recovers, we should expect consumption expenditure among black people to resume growth," said Ratsoma.
- Fin24.com