Retail sales will point to availability of cash
It’s another short week, with a public holiday on Friday. While economists will be focused on the aftermath of the Moody’s downgrade announcement, the retail sales figures should provide an idea of how the economy did at the start of the second quarter.
After the lower than expected mining and manufacturing production numbers last week, Statistics SA will release the retail sales figures for April on Wednesday. These will indicate how the consumer side of the economy did in April.
Capital Economics economist John Ashbourne said: “April’s activity data suggest that SA’s economy remained weak at the start of Q2. [This] week’s retail sales figures will give us a clearer indication of whether crucial consumer-facing sectors picked up.”
In the first quarter, the contraction in retail sales contributed to the negative contribution of the trade, catering and accommodation sector, which declined by 5.9%.
Investec economist Kamilla Kaplan said: “The retail sales update for April will provide some indication of whether the weak momentum followed through to the start of the second quarter. We expect the April outcome to have been affected by statistical base factors as the Easter holidays occurred in March in 2016, but fell in April this year.”
Kaplan expects the annual growth to moderate to 0.2% year on year in April from 0.8% in March.
Kaplan added: “Aside from statistical effects, underlying momentum is likely to have remained weak amid high unemployment, a higher interest rate and tax rate environment, modest credit extension and depressed consumer confidence.”
The RMB/Bureau of Economic Research (BER) Business Confidence survey is also expected on Wednesday, while the South African Chamber of Commerce and Industry will release its trade conditions survey.
The RMB/BER business confidence index has been entrenched below the 50 mark for more than two years, signalling persistently depressed confidence on weak economic growth, the Cabinet reshuffle at the end of March and the subsequent sovereign credit rating downgrades.
THE FIGURES WILL INDICATE HOW CONSUMER SIDE OF THE ECONOMY DID IN APRIL