The BankservAfrica Economic Transactions Index (BETI) for April showed the highest rebound since 2014, suggesting economic activity lagged in the first months of 2019 owing to reasons such as load shedding.
The BETI measures monthly transactions paid into the South African National Payments System, managed by BankservAfrica, and is the fastest now indicator of broad economic activity.
“The BETI increased by 1.6% in April on a month-on-month basis. It also showed significant growth on a quarterly and annualised basis,” says Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements.
The actual number of transactions in the BETI was 103,4-million, a 6,6% year-on-year growth and at a value of R852,2-billion, according to Naidoo. This is an indication of the delayed effect of load shedding in March as transactions in that month declined by 1,4% on a year-on-year basis.
However, April’s figure is still below the highs of October and November 2018 and, with most transactions now up-to-date, it is likely that May’s numbers will return to “normal”.
The average nominal transaction increased by 3.2% on a year-on-year basis and carried an average value of R8 246 per transaction. The standardised value, which adjusts for working days in the month, showed a nominal value of R895,2-billion.
“April’s BETI figures is a major change in direction and indicates that after the dismal first quarter of 2019, the economy is making great strides into positive territory in the strongest way possible,” says Mike Schüssler, chief economist at Economists dotcoza. He cautions that April’s figures are also the result of the delayed transactions from the load shedding in March.
“Still, April’s figures moved the entire quarter into positive after March, where the largest decline in eight months were experienced. This shows that other factors were at play,” says Schüssler.
“There is greater volatility when measuring economic transactions compared to GDP. But it is rare for the BETI to go from a 1.9% year-on-year decline in March to a positive 1.3% year-on-year increase in April.”
April’s figures are also the biggest change in direction since March 2010 – the end of the global recession. The change in direction was 3,6% in March 2010 and 3,2% in April 2019 when measured on a year-on-year basis. On a quarterly basis, the change was 2,1%, which is the highest since June 2015 when the change was 2,5%.
“A monthly data point in isolation is not a trend but it does seem that the negative first quarter data was a little overblown with economic activity delayed – owing to load shedding – rather than canned. As such, we can say the April 2019 BETI data now records the ‘catch-up phase’,” says Schüssler.
“Overall, April’s BETI makes one question if South Africa is finally entering its Ramaphoria moment and if the long downward business cycle is over. Time will tell but at least we have an encouraging sign. And, perhaps with the elections over, we can get down to the business of growth again,” Schüssler says.