The local economy may be on the road to a recovery after a dreadful September.

The BankservAfrica Economic Transaction Index (BETI) for October shows the real value of transactions in October recorded the strongest monthly and quarterly changes since December 2017.

“The standardised transaction value which accounts for the number of working days and weekends reached R871,7-billion in October, representing a monthly increase of 7,9%,” notes Shergeran Naidoo head of stakeholder relations at BankservAfrica. “At the same time, the number of actual transactions reached the highest level ever with over 107.5 million transactions going through the South African interbank payment system.”

Naidoo notes that the number of transactions increased by 1,4%, but the average value of the transactions declined for the 18th consecutive month.

However, the average value per transaction was R8 511, which is a 1,1% decline compared to 2017. “This suggests the caution applied by economic roleplayers when transacting which could be attributed to the lack of some confidence and uncertainty.”

“While October seems to have been a positive month in real terms on all three periods – the first measured since February 2018, the problem is that the South African economy is static, showing no major forward or backward movements,” comments Mike Schüssler, chief economist at Economists dotcoza.

The South African economy is recording movements in a different direction on a monthly basis, and often various sectors record changing numbers on a regular basis.

“For example, the BETI has recorded seven month-on-month increases over the last year and five monthly declines. On a quarterly ago basis there have been six increases recorded and six decreases recorded over the last month,” explains Schussler.

“The only consistency in the South African economy at present is that the economy is trending around the flat line and switching between increases and decreases,” he adds. “It is concerning that the South African population is growing at 1,7% a year, while the economy remains in a downward phase for a record 59 months now.”

Even though the BETI is offering some hope that the South African economy may be recovering, Schüssler says the BETI has shown before that one great data point does not make a trend or a story.

He indicates that in the previous quarter, mining production declines were more than 8% while manufacturing increased by 7%, and vehicle sales recorded were the highest in three years in October. In the same month, the Absa Manufacturing Purchasing Managers Index slipped to a 16-month low.

“The actual BETI level is still below the high reached in December 2017, and this indicates that gross domestic product may be recovering on an annualised quarterly basis. But on an annual basis, the economy remains flat,” Schüssler says.