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October 18, 2024

A View on Demand in the Economy: Retail Sales Performance

In August 2024, South Africa’s retail sales grew by 3.2% annually, exceeding the expected 1.0% increase. This indicates a positive shift in consumer demand, driven by lower inflation and improved economic sentiment. Growth was primarily led by general dealers, which posted a 4.6% rise, contributing 2.1 percentage points to the overall growth, while hardware retailers saw a decline of 4.5%.

Despite the encouraging trend, consumer demand remains somewhat restrained due to tight household budgets and high interest rates. However, a recent rate cut of 25 basis points in September could boost spending and support further growth in the coming months. The full impact of this rate reduction is likely to be seen in retail data from October 2024 onwards.

Overall, while demand is gradually improving, households remain cautious. The combination of improved sentiment and lower inflation may pave the way for stronger economic growth as the year progresses.


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In September 2024, South Africa’s producer price inflation slowed to a 1.0% annual increase, down from 2.8% in August, with a monthly deflation of 0.3%. Key contributors included rising costs in food, beverage, and intermediate goods, while mining costs fell. Concerns remain over elevated water and electricity prices exceeding the SARB’s target range.
Inflation slowed markedly from 4.4% in August 2024 to 3.8% in September, slowing more aggressively than market expectations of 4.1%. Month-on-month growth was minimal at just 0.1%.
In August 2024, South Africa’s retail sales grew by 3.2% annually, exceeding the expected 1.0% increase. This indicates a positive shift in consumer demand, driven by lower inflation and improved economic sentiment. Growth was primarily led by general dealers, which posted a 4.6% rise, contributing 2.1 percentage points to the overall growth, while hardware retailers saw a decline of 4.5%.
South Africa’s manufacturing production fell by 1.2% annually in August 2024, attributed to declines in motor vehicle and basic iron production. While food and beverages grew by 5.8%, businesses remain cautious, holding large cash reserves. Companies are waiting for the Government of National Unity to clarify industrial policies and implement promised reforms.
Mining South Africa rose by 0.3% in August 2024, led by increases in manganese, PGMs, and chromium ore. However, declines in iron ore and gold production tempered the growth. Mineral sales fell by 9.9% annually, driven by a sharp drop in gold sales. The sector remains crucial for the economy, employing around 457,000 people.
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