Attention will be on retail sales and mining output

Stats SA will publish retail sales and mining production figures on Wednesday and Thursday, respectively. In October, retail sales continued to be weighed down by load-shedding, with general dealers among the hardest hit, indicating that poorer households remain under immense strain.

October retail trade declined 2.5% from a year earlier while market estimates suggested a 0.9% increase. It was the steepest decline since May, according to Trading Economics. It followed an upwardly revised 1% year-onyear rise in September.

RMB analysts said the September outcome was made possible by retail support such as lower inflation and stable interest rates.

On a monthly basis, retail sales fell 1.2% in October, the most in more than a year after a revised 0.1% drop in the previous month.

Absa senior economist Miyelani Maluleke said the data shows consumer demand is under pressure and it provides more“clues GDP. Household about consumption fourth-quarter expenditure fell for two consecutive quarters in quarter two and quarter three,” Maluleke said.

FNB senior economist Siphamandla Mkhwanazi said October’s retail activity was in line with FNB’s expectations, especially after the release of the consumer confidence index from FNB and the Bureau for Economic Research (BER).

He said the index continued on a downward trajectory, edging slightly lower to minus 17 index points in quarter four from minus 16 in the third quarter, the lowest festive season reading in more than 20 years.

BER economists said the upcoming retail sales numbers will include the Black Friday shopping period, so it will be interesting to see whether there was significant growth in spending relative to 2022. “While consumers were and are under pressure ... bargainhunting may have helped volume growth. This data will help colour in the picture for quarter four GDP.”

The focus will shift to the productive’ sectors of the economy with the release of November s mining activity.

Mining’s contribution to GDP eased to 7.53% in 2022 from 7.56% in 2021 as full-year mining output declined 6.9% from 2021. Production in 2022 was 6.7% lower than pre-Covid levels, according to Minerals Council SA.

The sector was also one of the main reasons for SA’s economy contracting 0.2% in the third quarter compared with the previous three-month period, suffering from tepid international demand, infrastructure bottlenecks and load-shedding.

Mining production staged a surprise rebound in October, driven mainly by platinum group metals, manganese ore and chromium ore.

Stats SA data showed mining production expanded 3.9% from a year ago after a 1.9% drop in September, surpassing market forecasts of a 1.5% rise.

October marked the first upturn in industrial activity after three consecutive months of declines.

The outcome was also the strongest since November 2021 when output expanded by 6.5% year on year.

On a month-on-month basis, a breakdown critical for the calculation of quarterly GDP growth, mining output expanded by 2.1%, rebounding from an upwardly revised 0.1% monthly contraction in September.

FNB senior economist Thanda Sithole said while it is too early to draw conclusions about the sector’s likely contribution to fourth-quarter GDP, October’s outcome is encouraging.