Despite the tough economic times, South African consumers were buying furniture, appliances and textiles in April this year. Data from Statistics SA show that retail sales were up 3.4% in April from a revised 1.7% in March this year.
The largest contributors were broad, with retailers in household furniture, appliances and equipment leading and adding 6.8% points, retailers in textiles, clothing, footwear and leather goods contributed 6.4% and general dealers added 5.4% to the overall number.
However, retailers in the hardware, paint and glass category saw a 8.3% April decline and detracted 0.7% points from the headline reading.
Investec economist Lara Hodes says:
On a month-on-month seasonally adjusted basis, retail sales were down 0.2%.
Hodes says: “Many households are still financially stretched in the current economic environment. Unemployment remains at heightened levels, amid a sluggish labour market, while elevated administered and food prices continue to dilute disposable incomes. Moreover, rising interest rates are weighing heavily on the indebted, with the probability of a further 50 basis points rate hike by the Reserve Bank next month.”
READ: Unemployment growth must be labour intensive
Meanwhile, business confidence last month was down to its lowest level in two years. In a statement, the SA Chamber of Commerce and Industry (Sacci) says the business confidence index (BCI) dropped 4.4 index points from 93.7 in April to 89.3 index points last month.
Sacci says the dip in BCI was in line with other economic and financial market data in the second quarter of this year. It added while the general trend in business confidence during the first three months of the year was positive and in harmony with improved economic activity (GDP growth), more negative sentiment in the business climate occurred in April and last month.
The Sacci BCI lost momentum after all the sub-indices except for increased real credit extension to the private sector contributed positively to the business mood.
It added: “It might take a while for the economy to gain momentum from the structural economic disruptions that followed on the lockdown regulations.”