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Retail September trade growth seen at 6.5%
Retail September trade growth seen at 6.5%

Retail September trade growth seen at 6.5%


Business Live - Nov 15th 2011, 10:33

Growth in SA’s retail trade sales at constant (2008) prices for September is expected to lose momentum to a decrease of 6.5% year on year (y/y), from a y/y growth of 7.1% in August, according to a survey of leading economists by BusinessLIVE. 

Forecasts among the eight economists ranged from 5.7% to 7.1%.

Nedbank economists, Johannes Khosa, Carmen Altenkirch and Dennis Dykes said slower growth in consumer incomes and muted consumer confidence were likely to have dampened sales growth over the month, with month-on–month sales likely to have remained flat.

On an annual basis, growth in retail sales is forecast to have eased to about 5% following a 7.1% surge in August, the economists noted.

Meanwhile, Absa Capital’s Gina Schoeman said the final piece of the third quarter GDP puzzle would be released this week in the form of September retail sales.

“We look for retail sales growth to measure 6.4% y/y from 7.1% y/y, August - slower, but nevertheless still robust which is critical for the third quarter GDP.

“If we are correct, retail sales growth on a quarter-on-quarter seasonally adjusted annual rate basis would measure around 5.0%, versus 2.4% q/q previously - this would imply that the trade sector was able to support overall economic growth in the quarter,” the economist commented.

Zandile Makhoba, economist at Econometrix, said that although retail sales growth was expected to decline somewhat during September, it was expected to remain robust around 6.0% y/y, raising the third quarter of 2011's retail sales growth average from the second quarter of 2011.

“The sharp improvement in retail sales growth in August came as a surprise to the market, pointing to a more resilient consumer demand in the economy despite the rising trend in consumer prices - retail sales growth improved to 7.1% y/y in August from 3.0% y/y in July, she said.

Makhoba added that August's figures suggested that price pressures on household balance sheets were likely to lag the rise in inflation, while the low interest rate environment and stronger increases in wage rates and salaries provide a buttress to consumer demand.

The September retail trade sales data will be released by Statistics SA at 13:00 on Wednesday, November 16. 

Read more about: | analysis | consumers | retail trade

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