Wholesale trade sales on the up

Johannesburg - Wholesale trade sales at constant (2000) prices for October improved slightly to -11.5% year-on-year (y/y) after declining a revised -12.4% (-12.6%) in September, Statistics South Africa data showed on Wednesday.

Wholesale trade sales grew at 5.9% in 2008 and 6.3% in 2007, but have been negative for each month of the year so far in 2009 and in double digits since April. Today's slight improvement thus brings scant relief, indicative of continuing consumer pressure.

Economist from Efficient, Freddie Mitchell, says it is very difficult to say when wholesale trade sales will start showing signs of recovery while consumer confidence is low within the market.

"The continued contraction in wholesales, albeit lower, just underlines the pressure and weakness wholesale is still experiencing within the economy even though South Africa moved out of the recession during the third quarter."

Today's data showed that wholesale trade in real terms (constant terms) for the three months ended October declined by 12.2% compared with the corresponding period in 2008. Comparing the three months seasonally adjusted figures ended October 2009 with the three months ended July 2009, a 0.9% decline is witnessed.

This comes as South African retail trade sales at constant (2008) prices for October were recorded at -6.5% year-on-year (y/y) from a revised -4.9% (-5.1%) in September, according to figures released on Wednesday by Statistics South Africa. This was worse than expected and ushered in a call form some quarters for another rate cut to provide impetus to the economy.

This wholesale number is not a good sign of a strong upward trend to come either.

There may be some emerging that South Africa's economy has hit the bottom, but this was not one of them.

- I-Net Bridge