Cape Town - Although South Africa is not yet in a recession, it is in a per capita recession, according to the November BankservAfrica Economic Transaction Index (Beti) report.
This is because income per capita has been in decline for a long period due to economic growth being slower than population growth.
"South Africans have seen their income decline in real terms for three years on average. All these indications suggest that 2017 could be the fourth year of the per capita recession," according to the Beti report.
"With South Africans poorer than they were in 2012 in real terms, the Beti should be closely monitored for any signs of a turnaround. At present, however, the November Beti suggests that the economic slowdown is getting deeper."
The Beti report points out that the weak 2016 domestic economy is reflected in the fact that, at 1.2% lower than in November 2015, the November Beti is at its lowest since August 2014. The low point in August 2014 was when the worst private sector strike season in decades took place.
According to the latest Beti report, the domestic economy is still in a vicious downswing and the recent figures suggest that a further gross domestic product (GDP) decline may be on the cards in the fourth quarter of 2016.
Furthermore, the quarterly decline in November (-2.2%) occurred for the seventh consecutive month in a row in 2016. It is the first time since December 2009 that this has emerged.
While the third quarter GDP growth of 0.2% was due to the strong growth in the mining sector (up 5.1% on the second quarter) and with some signs of life in the government and financial sectors, the rest of the economy was flat to negative. Manufacturing, agriculture, electricity as well as the wholesale and retail trade all shrank in the third quarter.
The Beti indicates that the fourth quarter may in actual fact be weaker than the third quarter, although it will be a close call, according to the Beti report.
"Slower growth in the fourth quarter always influences the outcome of the following year as momentum is easier to maintain than to build up. If not for the additional R21bn in platinum sales in the second and third quarters, the SA economy would have been in a technical recession," states the Beti report.
"Domestic spending and domestic production were both in the doldrums in 2016 and the big collapse in mining in the first quarter hit other sectors in the economy. If it were not for tourism and a pick-up in international commodity prices, the economy would have been even further in the doldrums."
Although the volume of transactions in November increased by 7.5%, the actual value in nominal transactions increased by only 0.5%. The standardised value of transactions was R796.2bn and is 5% year-on-year higher in nominal terms.