Retail figures expected to trend down

All eyes are on Stats SA tomorrow when the statistics authority releases its Quarterly Labour Force Survey (QLFS) for the year’s first quarter (Q1).

The following day it will reveal retail sales figures for March.

Strong industrial and mining data for Q1 created an air of optimism resulting in spend strength that could be seen in the sector, but early indications from analysts point to tomorrow’s QLFS figures reflecting muted consumer buoyancy.

Jeff Schultz and Mamello Matikinca-Ngwenya, leading economists from BNP Paribas bank and FNB respectively, seemingly believe that until improvement is seen in South Africa’s high unemployment rate, retail in South Africa will remain constrained.

Currently, employment is at over 27% with expectations that it will dip further to around 27.5% later in the year.

For those in the labour force that are lucky enough to find themselves employed, constrained wage growth on the back of a sluggish economy has been cited as a principal reason for low consumer activity.

Weak domestic demand and inflation have also been cited as leading contributors to low spend figures.

Available data furthermore shows that retail for March softened 1.1% year-on-year.

However, for the whole of Q1 it could marginally improve February’s reading of 1.8%, but Schultz and Matikinca-Ngwenya said on the whole they were not holding their breath.

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