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Johannesburg - Growth in SA's retail sales quickened to 6.4%
year-on-year in August compared with a revised 2.9% in July, Statistics South
Africa said on Wednesday.
On a month-on-month basis sales were up by 2% in August and
rose by 6% in the three months to August compared with the same period a year
ago.
Economists in a Reuters survey expected retail sales growth
of 4.6% in August.
“One shouldn’t overlook the downward revision that occurred
in the prior month, so month-on-month growth wasn’t really that strong if you
take out that downward revision.
“We expected it (retail sales growth) to be stronger given
the fact that we had that rate cut in late July, which would have contributed
more money in people’s pockets to spend.
“Retail sales growth is quite volatile and is not that much
up from last month so it won’t be changing any interest rate views in
particular. Our interest rate view is that interest rates are going to stay
unchanged until the end of 2014 and this data only supports that view,” said
Ilke van Zyl, economist at Absa Capital.
Said Thabi Leoka, senior Standbank Bank: “We said in the week that even though the
number may seem promising - we forecast 5.9% - it is not necessarily an
indication of household consumption.
“Looking at it that way we expect household consumption
expenditure to slow, and we expect spending on durable goods to slow as well.
“It is also leading up to the Christmas season, we are
likely to see a firmer number, but that doesn’t necessarily indicate consumer
sentiment.
“If you also look at confidence index surveys, they are
still in negative territory, implying that consumers still don’t have a
positive outlook on the domestic front.”
Dennis Dykes, chief economist at Nedbank said: “These
numbers have been very volatile. It’s difficult to draw strong conclusions, but
(the data) is a bit stronger than expected.
“We think that on balance over time, it’s going to settle to
a slightly weaker range. Disposable income is likely to be under some pressure,
because of higher inflation and employment not rising very much.
“Consequently we would expect consumer spending to come into
this 4-5% type of area.”
Anisha Arora, emerging market analyst added: “South African
retail sales have positively surprised in August, rebounding to 6.4%
year-on-year following last moths disappointing and now further downwardly
revised figure at 2.9%.
“Further ahead, the recent mining strikes over demands for
higher wages which spread to manufacturing and the service sectors could weigh
on retail trade, especially given increased job losses and dampened confidence.
However this may be offset by higher wages above the rate of inflation.”
Market reaction
The rand firmed to R8.6550 against the dollar at 11:39 GMT
from R8.695 before the data was released at 11:00 GMT.
The yield on the benchmark 2015 bond was steady at 5.38%.
Sales growth undershot market expectations last month,
coming in at 4.2% (later revised to 2.9%) compared to a market forecast of
7.1%.
Statistics South Africa said the data had been drawn from a fresh 2012 sample, replacing the previous year’s sample.
Retail sales averaged 5.9% last year, compared with 5.1% in
2010. Analysts expect sales will slow this year as higher fuel and food costs curb
non-essential spending.
Consumer spending underpinned economic growth in the last half of 2011 as demand sectors grew.
