Retail trade sales show unsurprising growth
Retail Trade and Inflation: The Numbers
Real Retail Trade Sales: January 2009 1.7% vs -0.2% in December 2008
Nominal Retail Trade Sales: January 2009 12.7% (year over year) vs 12.1% in December
Retail inflation: January 2009: 10.8% (year over year) vs 12.3% in December
Consumer Price Inflation January 2009: 8.1% (year over year) vs 9.5% in December
RETAIL TRADE SALES SHOW UNSURPRISING GROWTH
The real growth in retail sales was in line with own projections and much higher than the market consensus. The larger than consensus increase should not have been a surprise, considering that real retail sales reached its low point in July last year from where five consecutive monthly increases until December were registered. Though real sales were lower in January compared to December, it is mainly as a result of Christmas sales. Looking forward, real retail sales growth should increase gradually and start to accelerate from July onwards.
More positive news is that retail inflation decelerated significantly to 10.8% from 12.3% in December.
Real Retail Sales and Retail Inflation
|
Date |
Retail |
Retail sales |
|
|
Inflation |
% change |
|
Jan 08 |
10.35 |
0.7 |
|
Feb |
11.46 |
2.9 |
|
Mar |
12.56 |
-1.5 |
|
Apr |
12.68 |
0.2 |
|
May |
13.73 |
-4.2 |
|
June |
14.48 |
-1.5 |
|
July |
16.75 |
-4.6 |
|
Aug |
17.65 |
-5.6 |
|
Sept |
17.00 |
-5.6 |
|
Oct |
15.85 |
-2.2 |
|
Nov |
15.31 |
-4.4 |
|
Dec |
12.29 |
-0.2 |
|
Jan 09 |
10.80 |
1.7 |
Though the petrol price increases since February will negatively affect retail sales, the reduction of one percentage point in the repo rate in February, the further decreases in the prices of diesel and illuminating paraffin, as well as the income tax concessions of R13.6 billion which took effect on 1 March, will support retail sales in the first quarter. More interest rate reductions will support retail sales through the rest of the year, but retrenchments will work against a huge improvement in retail sales in 2009. Indeed, if the drop in spending due to retrenchments outweighs the increase in spending due to improved personal financial conditions, retail sales might increase at a slower pace.
The positive retail sales growth will to some extent neutralize the negative production numbers in the mining, manufacturing and electricity industries. It also shows that the financial services sector (largest sector in the economy) should have experienced positive growth in January 2009. As such, we need to caution against too negative economic growth numbers for the first quarter 2009.
