The BankservAfrica Economic Transaction Index (BETI) is showing signs of a slight slowdown. There are, however, still reasons to remain optimistic of a shift in growth to higher levels in months to come.
“The February BETI – the broadest now indicator of real turnover in the South African economy – shows transactional growth fell to 3% in February from 3.5% in January,” says Shergeran Naidoo, head: stakeholder engagements at BankservAfrica. “This comes after a very strong December and January.”

Growth between January and February, much like between December and January, was almost flat. The seasonally adjusted and standardised BETI figure adjusted for inflation continues to show a flat trend between these months.

“The movement in these months suggest the BETI is again a little skittish with growth in the agricultural and mining sectors where this is not as strong as before. Consumer spend and retail sales have also slowed down after a very active November and December spending period,” says Mike Schüssler, chief economist at Economists dotcoza.

There are, however, signs that confidence may be returning for businesses and consumers.

“The non-decline in the BETI in the last four months is the longest in nearly five years, and provides reason for optimism,” says Schüssler. The last time South Africa saw the BETI record no monthly declines for four consecutive months was in April 2013.

“Therefore, while monthly growth is not unusually high, the BETI results suggest that there is a positive sentiment in the country enabling a new, higher level of economic transactional activity,” Schüssler explains.

The number of transactions grew at its strongest level since February 2013 to 94.6 million, representing the highest growth in five years.

“Despite the growth in the number of transactions, the average size of the transactions declined by 2.6% on a year-on-year basis in nominal terms,” says Naidoo.

March’s transactional numbers are expected to be more positive as consumers pre-empt the VAT increase by buying some non-perishable items ahead of the increase in April. Also, as the fuel price lowers, consumers ought to also have a little more surplus cash which could also be used to purchase these non-perishable goods.

The first two months of the quarter indicate a slower economic performance after the surprise 3.1% growth in GDP in the final quarter of 2017. Although the BETI did reflect strong positive growth for the last quarter of 2017, it nevertheless came as a surprise that the growth was over 3%, says Naidoo.

“This data gives us reason to believe that sustained growth will continue but most likely not at the same levels as 2017 due to the soon-to-be implemented VAT and sugar tax changes in April,” says Schüssler.