Black Friday: A needed boost for SA’s economy

Leaving hope for economic growth in the final quarter of the year, but load shedding threatens to derail that.
Image: Victor J. Blue, Bloomberg

Black Friday restored a little bit of hope for South Africa’s beleaguered economy.

BankservAfrica’s data showed a 36% year-on-year increase for Black Friday card transactions, giving the local economy a much-needed boost.

The BankservAfrica Economic Transactions Index (BETI), which measures economic transactions and excludes in-store and manufacturers, found card transactions increased by 1% between October and November. This comes after October’s small increase.

The average value per transaction was R8 843 – R207 more than a year ago. In real terms, the average value per transaction increased by 1.5% year-on-year.

While this increase is positive, the overall rise was slightly lower than October’s growth.

Mike Schüssler, chief economist at Economists.co.za, says Black Friday was about more than consumers and their spend.

“It extended to the entire value chain of marketing and advertising, importers, manufacturers, wholesalers and retailers.

“The Black Friday and Cyber Monday shopping campaigns are changing the seasonality of the economic cycle in South Africa at present.”

Schüssler says the third quarter (Q3) GDP contraction of 0.6% – which had the manufacturing, transport and mining industries reporting large decreases – was expected by those who follow the BETI.

Although the short-term trend is more positive than before, it is not strong enough to induce an end to the downward phase of the South Africa business cycle.

Schüssler says Eskom’s woes and load shedding are derailing the progress made in the retail sector last month. They’re likely to turn potential positive GDP growth for Q4 into a decline.

“While we do not know how long the rolling blackouts are here for – or the extent of the situation – we know for a fact that October and November were positive months for economic transactions. November was a bumper month, but December could be the direct opposite,” Schüssler says.

Breaking sales

According to Shergeran Naidoo, head of stakeholder engagements at BankservAfrica, the BETI for November was 129 – a vast improvement on the previous month’s 127.7.

Naidoo says it recorded the highest ever number of transactions of 104.8 million in November. This was only lower than December 2018’s figure. The standardised value of transactions was R944.4 billion in nominal terms.

Naidoo says the quarter-on-quarter BETI trend is another significant movement.

“Although it remained negative at 0.3% in November, it is a sizeable improvement from -2.1% in October,” says Naidoo.

He agrees that Black Friday paid off for the South African economy.

“The year-on-year growth experienced in the BETI may have only come in at 0.4% but it was a positive change in trend from October’s decline of -0.5% year-on-year; the -0.7% for October 2019 was adjusted upwards due to the lower-than-expected inflation,” says Naidoo.

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