Domestic Spending on Record High

BankservAfrica’s Economic Transaction Index (BETI) shows a record number of consumer transactions for July. “The BETI reflects 84.2 million transactions for the month of July, which is the highest number of transactions in the life of this index so far,” said BankservAfrica regulated products CEO Brad Gillis. “While one ray of sunshine does not make a summer, the fact remains that the BETI has now seen improvements, in real terms, in five out of the last seven months of 2013.” The year-on-year increase for July was 3.9%, up from 2.8% in June.

Chief economist for, Mike Schussler, said the latest index indicated that third quarter gross domestic product figures were also likely to be stronger than predicted. “Although still early days in the quarter, the South African economy is in a short-term upward trajectory if one looks at the latest BETI figures,” he said. He was confident that negative forecasts would be reviewed and that there would be a more positive outlook in the next few months. The growth in July index numbers was supported by the latest Kagiso Purchasing Managers’ Index (PMI), which had been above 50 points for four consecutive months. Schussler said new vehicle sales were also up by 7% in July from a year ago.

Retail sales were stronger than expected in May, while manufacturing data over the last quarter had outperformed many expectations. “Even mining, which was in the doldrums before, is showing increasing production, together with electricity production. For the first time in 15 months the quarter-on-quarter electricity data will not be negative,” he said. He cautioned against extreme pessimism over the economy. “The South African economy has now been growing for 47 months in a row, which is still the second-longest growth performance in many a decade.”

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