Wholesale sales up

2008-04-17 00:00

Real year-on-year growth in wholesale trade sales for February 2008 increased by 7,7%, buoyed by the performance of traders involved in the sale of fuel products, machinery and equipment and food and beverages.

However, the marginally upbeat performance came largely on the back of higher oil prices, among other factors, and it is anticipated that wholesale growth will soften further in the coming months.

Year-on-year sales growth in real terms for the quarter (three months ending February 2008) increased by 5,7%, as sluggish growth in December 2007 weighed heavily on this figure.

Doret Els, economist at the Efficient Group, said that although the upturn in the wholesale data is a positive development in light of low retail figures, much of this is due to the fuel-related and machinery sub-categories following oil price rises and increased production.

"Cognisance must, however, be taken of the fact that the data was compiled in February — before the hike in fuel prices and the hike in interest rates … With the strong possibility of a substantial increase in electricity prices, this could add pressure to waning consumer demand."

Economist at Brait, Colen Garrow, told The Witness that sales of necessities seem to be buoyant, adding that "necessities will be bought in any environment, and for this reason, high interest rates are likely to be nothing more than a blunt instrument in dealing with any inflationary pressures".

Garrow warned that the statistics do not take into account a number of factors, including cross-border shopping. "Another is disposable incomes being higher in SA," said Garrow.

Other data out yesterday revealed that motor trade sales for the three months ended February 2008 increased by 5,5% year on year. In keeping with a moderation in growth experienced by the sector, this figure is below the 15,2% quarterly increase of last year.

Although the 5,5% increase was supported by high fuel sales, the new vehicle sales market contributed significantly to the softer overall growth.

Motor trade sales for February 2008 increased by 8,3% year on year, 6,5% lower than 2007.


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