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Retail sales: South Africans spent R19.6 billion on clothes and furniture in May
Retail sales: South Africans spent R19.6 billion on clothes and furniture in May

The Citizen

time7 days ago

  • Business
  • The Citizen

Retail sales: South Africans spent R19.6 billion on clothes and furniture in May

Consumers spend R87.5 billion on retail sales since the beginning of 2025 and mostly paid for their shopping with credit. South African consumers spent a whopping R19.6 billion in May on clothes and furniture, although momentum in the retail sector seems to be slowing. According to the retail trade sales numbers issued by Statistics SA today, retail trade sales, measured in real terms (constant 2019 prices), increased by 4.2% in May compared to May 2024. The largest positive contributors to this increase were retailers in textiles, clothing, footwear and leather goods (12.5%) and general dealers (3.6%). Seasonally adjusted retail trade sales increased by 0.1% in May compared to April after month-on-month changes of 1.1% in April and -0.3% in March. Retail trade sales increased by 3.5% in the three months ended May 2025 compared to the three months ended May 2024. ALSO READ: How Shoprite made R20 million profit per day But retail sales were flat for past three months The largest positive contributors to this increase were again retailers in textiles, clothing, footwear and leather goods (9.5%) and general dealers (2.8%). Seasonally adjusted retail trade sales were flat in the three months ended May 2025 compared to the previous three months. The largest negative contributors were retailers in food, beverages and tobacco in specialised stores (-2.2%) and textiles, clothing, footwear and leather goods (-0.4%). The largest positive contributors were all 'other' retailers (1.4%), retailers in hardware, paint and glass (0.7%) and general dealers (0.2%). This chart shows that consumer demand has strengthened since early 2024, thanks to lower interest rates and favourable inflation: ALSO READ: Index reveals consumers are willing to spend money, but not too much No surprises in retail sales for May Jee-A van der Linde, senior economist at Oxford Economics Africa, says there were no surprises in the retail sales numbers for May. 'South Africa's retail trade sales growth moderated in May in line with our expectations. 'We predict private consumption growth to remain a key driver of overall economic growth this year, underpinned by easier monetary policy and low inflation.' Van der Linde points out that momentum in the retail sector seems to be slowing, with sales of 4.2% in May compared to a year ago after the 7.0% recorded at the start of 2025. 'Although we expect consumption growth to moderate over the coming quarters, households will remain a key driver of overall economic growth this year, underpinned by easier monetary policy and low inflation. 'We forecast a 25 basis points interest rate cut in the third quarter, followed by another incremental cut in the first quarter of 2026. Meanwhile, consumer confidence recovered during the second quarter, with middle- and high-income households – the most sensitive to interest rate changes – posting the strongest quarterly improvements. 'This latest data release aligns with our view of subdued economic activity in the second quarter, and we continue to forecast real GDP growth of 0.8% this year.'

Does stronger economic activity indicate improved GDP?
Does stronger economic activity indicate improved GDP?

The Citizen

time7 days ago

  • Business
  • The Citizen

Does stronger economic activity indicate improved GDP?

GDP growth for the second quarter is forecast at 0.6% compared to 0.1% the first quarter, in line with the BETI indications for the quarter. Stronger economic activity, as demonstrated by the increased number of electronic transactions in South Africa in June, can indicate an uptick in GDP for the second quarter after a disappointing first quarter. According to the BankservAfrica Economic Transactions Index (BETI), that measures the value of all electronic transactions cleared through BankservAfrica on a monthly basis at seasonally adjusted real prices, the BETI improved for the second consecutive month in June, indicating a more optimistic outlook for economic performance in the second quarter. 'The BETI increased in June to an index level of 139.1, representing growth of 0.4% in June and a second month of recovery,' Shergeran Naidoo, head of stakeholder engagements at BankservAfrica, says. 'After months of choppiness, the improved BETI signals a positive shift in overall economic activity in the second quarter, which could also be reflected in a favourable gross domestic product (GDP) outcome when Statistics SA publishes it in early September. ALSO READ: Economic activity picked up for the first time in 8 months in May Welcome uptick in economic activity Elize Kruger, an independent economist, says the uptick in the BETI is welcome, especially given that the economy started 2025 on the backfoot, with quarterly growth of only 0.1% in the first quarter and confidence indicators declining across the board. 'While several sectors entered a technical recession in the first quarter, recent indicators suggest a rebound in mining and manufacturing, with both sectors likely returning to growth in the second quarter. 'While some sectors remained resilient, others are still struggling amid ongoing challenges and notable risks. The renewed uncertainty about the impact of US import tariffs, not only in South Africa but across the globe, does not bode well for confidence and investments and will increase the downside risk to growth forecasts in 2025 and beyond.' ALSO READ: Structural reform is silver bullet needed for SA economy to grow Although South African exports are expected to come under pressure from higher US import tariffs, the elevated gold price and significantly lower international oil prices could soften some of the impact, Kruger says. 'Furthermore, a considerable share of South African export commodities has been exempted from the announced US import tariffs, which could provide a buffer for the mining industry and subsequently provide some support for the economy.' Other economic data also shows continued recovery The BETI's continued recovery is also reflected in other timeous economic indicators. naamsa data revealed that total vehicle sales improved by 18.7% in June, with year-to-date sales up by 13.6% compared to a year earlier, while new car sales in June grew by a notable 21.7% y/y and year-to-date were a notable 21.3% ahead. The S&P Global South Africa Purchasing Managers' Index (PMI) remained in expansionary territory with an index level of 50.1, though down from 50.8 in May. Although the report noted 'mixed signals' from the underlying components, the average quarterly reading was higher than in the first quarter. On the other hand, Kruger says, the seasonally adjusted Absa Purchasing Managers' Index (PMI), reflecting on prospects in the manufacturing sector, remained in contractionary territory for an eighth consecutive month at 48.5 index points, but up from 43.1 index points in May. After reaching an all-time high of 176.3 million in May 2025, the number of transactions cleared through BankservAfrica moderated somewhat in June to reach 167.3 million, still 13.5% up on a year ago, Naidoo says. ALSO READ: Economic activity slows in April as economy struggles Value of economic transactions also increase The standardised nominal value of transactions also increased to R1.361 trillion in June compared to R1.351 trillion in May 2025, with the resultant average value per transaction covered in the BETI increasing to R7 747, compared to May's R7 618, showing a 1.7% monthly increase. Kruger says locally some structural tailwinds should also continue to buffer the economy against global headwinds. Headline inflation remains below the South African Reserve Bank (Sarb) 3-6% target band at 2.8%, according to May's print. 'The average 2025 forecast is expected to be around 3.5%. The favourable inflation environment created ample scope for the Sarb to cut interest rates. 'Carpe Diem Research Services forecasts a 25 basis points cut to be announced at the upcoming Monetary Policy Committee (MPC) meeting on 31 July. This will likely be the final cut in the current downward cycle.' She adds that the low inflation environment will aid the recovery of salary earners' purchasing power. 'With average salary increases expected to be between 5% and 6%, 2025 will be the second consecutive year of real increases in salaries.'

SA's youth unemployment crisis: Can digital skills unlock their future?
SA's youth unemployment crisis: Can digital skills unlock their future?

The Star

time7 days ago

  • Business
  • The Star

SA's youth unemployment crisis: Can digital skills unlock their future?

A year into South Africa's national government of unity (GNU), the country's young people remain trapped at the precipice of despair. The promise of job opportunities and pathways for entrepreneurship continues to diminish, especially in a world increasingly led by a youthful population whose inventive thinking often conflicts with the traditional methods of those in power. This disconnection is not merely an abstract idea; it is a tangible reality for millions, showing as a deep sense of exclusion and a suppression of potential. The grim reality of South Africa's youth unemployment crisis is stark and well-documented. Statistics SA's Quarterly Labour Force Survey for the first quarter of this year paints a sobering picture: young people aged 15-24 face a staggering unemployment rate of 62.4%, while those aged 25-34 contend with 40.4%. These are not just numbers; they represent a generation sidelined, their energy and creativity unharnessed. With 20 million South Africans aged between 15 and 34, this demographic forms the largest segment of our population. This demographic dividend, a potential driver of economic growth and social progress, is instead becoming a source of national concern. This alarming reality requires urgent and decisive action, moving beyond mere discussion to implement tangible and impactful measures across all sectors of society. Our collective response must begin at home, extend through our communities, reshape our educational institutions, and energise our civil, public, and private sectors. The goal should be to nurture an active, future-oriented population, equipped to become tomorrow's leaders and innovators. Importantly, this quest for solutions must fully harness the transformative potential of technology. The rapid rise of generative Artificial Intelligence (AI), for example, should not be viewed with concern but as a significant opportunity. It prompts us to reconsider how we can utilise this technology to empower young people, unlock entrepreneurial talent, and boost economic development. It is time to move past the negativity rooted in a failure to recognise opportunities and instead embrace the immense potential within this digital frontier. At the Vaal University of Technology (VUT), strategically located in one of Gauteng's most influential industrial regions, we have long recognised this necessity. Our commitment goes beyond traditional academic teaching to proactive engagement with the digital future. Through initiatives like our Strategy 2033+, we focus on attracting and nurturing students with exceptional talent and potential, equipping them with the digital skills essential for a rapidly changing job market. Our recent community service project, where our Faculty of Applied and Computer Sciences assisted Suncrest High School's 2025 Grade 12 students with online applications, showcases our commitment to closing the digital gap and promoting a culture of access and opportunity from the grassroots. The Gauteng government's commendable focus on the township economy has achieved significant progress in supporting existing businesses. Nonetheless, our efforts must also shift towards empowering young people in these communities who aspire to start their own ventures, developing solutions and products tailored to local needs. This requires a concerted effort from all stakeholders, particularly financial institutions. They must explore innovative, concessional financing models that recognise the unique challenges and vast potential of youth-led township enterprises. We cannot continue to champion the township economy while failing to equip its most dynamic segment – our youth – with the necessary skills and financial lifelines. This year's UNESCO theme, 'Youth empowerment through AI and digital skills,' resonates profoundly with South Africa's challenges and aspirations. As a global community, we are collectively seeking solutions that improve young people's skills for both employment and entrepreneurship. UNESCO and other UN agencies have consistently supported the progress of the Sustainable Development Goals (SDGs). To truly accomplish these goals, we must put our solutions at the centre of the ingenuity and motivation of our young people, recognising them not merely as beneficiaries but as co-creators of our future. Furthermore, the latest World Economic Forum's World of Work report underscores that 'technological change, geoeconomic fragmentation, economic uncertainty, demographic shifts and the green transition – individually and in combination – are among the major drivers expected to shape and transform the global labour market by 2030.' While these are global forces, South Africa has a unique opportunity to lead in adapting and innovating. We can and must surpass the mediocre leadership that has often characterised our response to the challenges faced by our young people. This moment calls for visionary, agile, and collaborative leadership that recognises the urgency of digital transformation. At VUT, our concern about the high rate of youth unemployment runs deep. However, concern alone is not enough. We are committed to rolling up our sleeves and taking action that goes beyond mere talk. This commitment is reflected in concrete steps that clearly show our determination to make a difference. Skills development, especially in digital and AI skills, provides a strong pathway to solutions. Learning institutions are no longer static brick-and-mortar places; they are active partners in national growth, evolving to effectively address today's complex challenges and to produce graduates capable of leading in the digital era. This demands closer collaboration between academia, industry, and government to jointly create curricula, support innovation hubs, and enable smooth transitions from education to employment or entrepreneurship. The path ahead will be challenging. It demands courage, ingenuity, and most importantly, readiness to listen to young people's. The time for action is now. Professor Khehla Ndlovu is the Vice Chancellor of the Vaal University of Technology (VUT)

Government meets with Capitec CEO about unemployment statistics
Government meets with Capitec CEO about unemployment statistics

The Citizen

time07-07-2025

  • Business
  • The Citizen

Government meets with Capitec CEO about unemployment statistics

The CEO of Capitec does not think Statistics SA considers informal employment sufficiently when calculating the unemployment rate. After the CEO of Capitec, Gerrie Fourie, recently said he believes South Africa's unemployment rate should be 10% instead of the 32.9% as Statistics SA reported, government met with Fourie and his management team to discuss it. Minister in the presidency, Khumbudzo Ntshavheni, the Statistician-General, Risenga Maluleke and senior representatives from Statistics SA and National Treasury met with Capitec to discuss Fourie's statement that the unemployment rate should be 10% based on observations of informal economic activity. According to Statistics SA, its delegation gave a comprehensive presentation detailing the methodology behind the Quarterly Labour Force Survey (QLFS), a nationally representative, household-based survey that already includes informal and self-employed workers in line with International Labour Organisation standards. Ntshavheni first announced the meeting during Statistics SA's budget vote debate in parliament and also mentioned that the meeting will be followed by a meeting with other stakeholders. ALSO READ: Capitec's outgoing boss bemoans SA's high real interest rates Statistics SA will explore development of register for small business After the meeting, Maluleke described the discussions as cordial and constructive and indicated that Statistics SA remains open to exploring the development of a statistical register for small-scale and informal businesses, which he said would strengthen the quality and granularity of labour market data and support policy initiatives from the Department of Small Business Development. 'We listened to them, and we must investigate the issues of a statistical register for small businesses. Statistics SA methods remain robust. We do not fix statistics to feel better about our reality. We reflect that reality to enable the country to make evidence‑based decisions to change it.' Fourie welcomed the engagement with the Minister, the Statistician-General, and Treasury, and said Capitec is committed to working with the government and the private sector to help South Africa grow. 'The informal market is vibrant and dynamic, but we believe this growth will only be achieved once the informal economy is properly understood and supported with the right policy frameworks, infrastructure, funding and skills development.' ALSO READ: Is South Africa's unemployment rate really only 10%? Capitec and government will work together on unemployment statistics Maluleke said Statistics SA is committed to advancing data integrity and is evaluating additional statistical tools, including a register for informal enterprises. If implemented, this register will complement the QLFS and serve as a valuable sampling frame for improved labour market analysis. Capitec and the government delegation agreed to explore ways to continuously enhance understanding of the informal sector by leveraging a range of available data sources, including administrative records and research studies. Maluleke said that as part of coordinating producers and stakeholders within the broader data ecosystem under the National Statistics System (NSS), a series of methodological tests and innovations will be conducted over the coming years to refine labour market indicators and support inclusive economic policymaking. Ntshaveni and National Treasury also affirmed their support for open dialogue with stakeholders and for strengthening data systems across the economy.

Mining industry raises alarm over ferrochrome export tax as electricity tariffs receive nod
Mining industry raises alarm over ferrochrome export tax as electricity tariffs receive nod

IOL News

time03-07-2025

  • Business
  • IOL News

Mining industry raises alarm over ferrochrome export tax as electricity tariffs receive nod

Chrome mining has been one of the best-performing subsectors of the South African mining sector, with data from Statistics SA showing that chrome production increased by an average of 8.4% between 1994 and 2024 on an inflation adjusted basis. Image: Supplied Tawanda Karombo The Minerals Council of South Africa has raised concerns over the approval by government of an export tax on ferrochrome concentrates and welcomed the Cabinet's adoption of preferential electricity tariffs for ferrochrome smelters. Chrome mining has been one of the best-performing subsectors of the South African mining sector, with data from Statistics SA showing that chrome production increased by an average of 8.4% between 1994 and 2024 on an inflation adjusted basis. This reflects an accelerated pace of growth than the 1.3% recorded for non-gold production in South Africa over the same period. It was against this backdrop that the Minerals Council on Thursday said it was concerned by the approval by Cabinet of an export tax on ferrochrome concentrates. 'A particular concern in the Cabinet statement is the approval of the concept of an export tax on chrome concentrate. There remains no reason why export taxes would support increased beneficiation in South Africa now,' said the Council in a statement. The tax has previously been raised by government but extensive engagements with the chrome mining sector players resulted in the proposal being set aside. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ South Africa's chrome mining sector, said the Minerals Council, has consistently contributed to employment, with export volumes of the mineral topping 20.5 million tons in 2024. South Africa earned R84.6 billion in export revenue from chrome last year. Despite this employment and export earning potential, South African producers are increasingly mothballing chrome smelters, citing high electricity costs that are rendering them poorly competitive in the face of stiff competition from Chinese smelters. China has been able to offer its chrome smelters incentives, including lower electricity costs. South African producers have also recently battled erratic electricity supply although the government has moved in to address this by approving a preferential tariff for ferroalloy smelters. 'As a consequence of electricity prices increasing by nearly 900% in the past two decades, South Africa's chrome industry has opted to export chrome concentrate rather than beneficiate it at a loss.' The Minerals Council has welcome the Cabinet announcement on preferential electricity tariffs for ferrochrome smelters. This forms part of the government's measures in addressing the key factors that has rendered South Africa's ferrochrome industry uncompetitive. The use of Special Economic Zones to give the industry tax breaks has also been described as welcome. However, the mining industry employers' organisation said 'the details remain lacking, requiring extensive consultations with the government to understand these proposals and which industries will benefit' from the measures. 'To the extent that it prevents illegal exports of chrome, the Minerals Council welcomes the proposal to require all chrome exporters to obtain permits from the International Trade Administration Commission of South Africa,' said the Council. 'However, we would strongly oppose any suggestion that such a system be expanded or used to impose export quotas or restrictions on legally mined chrome.' South Africa, a major mining hub in the region, has identified platinum, manganese, iron ore, coal, and chrome ore as 'high-critical minerals' under the new Critical Minerals and Metals Strategy. It has also classified commodities such as gold, vanadium, palladium, rhodium, and rare earth elements as minerals with moderate to high criticality while copper, cobalt, lithium, graphite, nickel, titanium, phosphate, fluorspar, zirconium, uranium, and aluminium were identified as minerals with moderate criticality. BUSINESS REPORT

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