South African retail sales rebounded in March, but not enough to save a quarterly decline that may contribute to the country falling into a technical recession.
Stats SA reported on Wednesday that retail sales in March were 0.8% higher than the same month in 2016. However, because the Easter holidays fell in March 2016, but not in March 2017, the seasonally adjusted figure showed more moderate growth of 0.3%.
The 0.8% rebound in March followed declines of 1.6% in February and 2.3% in January, taking the decline for the first quarter to 1.1%.
Wednesday’s data provides economists with a clue as to whether the first quarter of 2017 will show SA’s gross domestic product (GDP) suffered a second quarter of decline after coming in at negative 0.3% in the fourth quarter of 2016. Two consecutive quarters of GDP decline is the generally accepted definition of a recession.
Retail is lumped into “trade, catering and accommodation” for calculating GDP. This segment accounted for 14% of the R3-trillion total in the December quarter.
Stats SA’s mining production data showed 3.5% growth in the March quarter, a strong rebound from an 11.5% decline in the December quarter. Mining contributed 7% of the fourth quarter’s GDP.
The decline in manufacturing, which contributed 12% of the total of SA’s December GDP, narrowed to 0.9% in the March quarter from 3.1% in the prior quarter.
At current prices, total retails sales amounted to R77bn in March. Stats SA accounts for inflation by adjusting the figure to 2012 prices, which came in at R61bn.
Stats SA segments retails sales into five categories. The largest, with a 45% slice of the total, general dealers, suffered a 0.8% decline in sales. Food and beverages retailers saw a 14.8% jump in sales, taking their contribution to 8% of the total.
Clothing retailers suffered a 5.6% decline, which the JSE appears to have anticipated with The Foschini Group’s share price down 3.8% to R147, Truworths’ down 2.6% to R74.47, and Mr Price down 2.6% to R144 at 1.20pm.
ROBERT LAING – Tiso Black Star Group