The results of four different statistical surveys published by Statistics SA within a few days all told the same story: devastation of economic activity and of people’s ability to earn a living. None of the industries covered by the four surveys escaped the damage brought on by the forced Covid-19 lockdown.
The reports covered sales and income in the motor trade industry, tourist accommodation, the transport industry, and food and beverage sectors. The figures show that all suffered severely during the quarter to end June.
April and May were the worst months, followed by a slight recovery in June. However, activity in June remained far below normal levels.
It is no surprise that tourism accommodation suffered the most, given the total ban on leisure travel for most of the last few months. The number of bed nights sold by hotels, guest houses and caravan parks had already taken a hit in March, declining by nearly 40% compared with March 2019.
April and May saw near complete destruction, with bed nights sold declining 97% against a year earlier, as occupancy rates fell to less than 2%.
Total income in the tourism accommodation industry just about disappeared, falling from normal levels of around R2.2 billion per month to less than R55 million in April and R74 million in May. A note to Stats SA’s numbers says the figures include income from restaurants and bars at the different establishments, which we can assume was not much above zero.
Owners of businesses in the tourism sector – characterised by small independent operators – could not earn any money at all and simply had no income to pay employees.
Year-on-year percentage change in tourist accommodation
|Jan 2020||Feb 2020||Mar 2020||Apr 2020||May 2020||Jun 2020|
|Stay units available||0,0%||-0,1%||-0,1%||-0,2%||-0,2%||-0,2%|
|Unit nights sold||0,7%||1,8%||-38,9%||-97,1%||-97,3%||-92,3%|
|Income from accommodation||4,7%||8,1%||-41,7%||-98,0%||-98,1%||-94,5%|
Source: Stats SA Tourist Accommodation Report, June 2020
Stats SA estimates that income earned by specifically guest houses and guest farms, declined by over 99% within the space of a few weeks – from R99 million in January to less than R500 000 in May.
Guest houses are mostly small family-run businesses.
Motor trade industry
The survey measuring trade in the motor industry found that sales fell by 49% (nearly R82 billion lower) during the three months to end-June, compared with the same quarter last year.
This translates to lost sales of around R1 billion every trading day.
April was the worst month, with turnover falling 84% compared with April 2019. It fell from R54 billion – around a monthly average – to less than R9 billion.
The loss of sales hit every participant in the sector. The notes explaining the research methodology say the information includes sales of new and used motor vehicles, fuel, oil, maintenance and repair work by workshops, motor cycle sales, spares and accessories, tyre sales, automotive electricians, radiator repairs, panel beaters and spray painters, and other sources of sales such as that at filling station convenience stores.
New and used car sales dropped more than 90%. The total sales value of new vehicles fell from above R13 billion in January and February to only R1 billion in April, while used car sales fell from R10 billion to R267 million.
Once again, the huge declines would have been expected, but the sheer magnitude of lost income to countless small businesses and their employees is staggering.
Year-on-year percentage change in motor trade sales by type of activity (current prices)
|Type of activity||Jan 2020||Feb 2020||Mar 2020||Apr 2020||May 2020||Jun 2020|
|New vehicle sales||-3,4%||-3,0%||-26,6%||-92,2%||-59,8%||-5,0%|
|Used vehicle sales||3,4%||6,6%||-17,5%||-97,3%||-56,8%||5,3%|
|Sales of accessories||0,2%||1,7%||-11,3%||-86,9%||-30,7%||-1,9%|
|Income from fuel sales||5,8%||12,2%||-11,2%||-71,1%||-50,1%||-34,1%|
|Convenience store sales||-3,3%||5,9%||-12,6%||-59,9%||-34,8%||-22,3%|
Source: Stats SA Motor Trade Survey, June 2020
It is interesting to note that the motor trade recovered sharply in June. New and used car sales increased to just less than normal, as did workshop income, income from the sale of accessories, and fuel sales.
Total income in June was only around 13% lower than in January and February, although car dealers would be quick to point out that sales in the first few months of 2020 were much lower than in the previous year.
Food and beverage sector
In its report Stats SA says the Covid-19 pandemic and lockdown regulations since March have had an extensive impact on economic activity in the food and beverage sector. The figures show that total sales of food and beverages declined by nearly 96% in April and May at current prices.
It was even worse when accounting for inflation.
Stats SA’s figures indicate that food and beverage income dropped to zero in constant prices.
The survey collects data from tax-registered private and public enterprises that provide food and beverages for immediate consumption, such as restaurants, coffee shops, takeaway and fast-food outlets, and catering services.
Of these, only catering services operated in April – but at reduced levels, and with income from food sales during April more than 60% lower than the average for January and February. Restaurants, coffee shops, and takeaway and fast-food outlets reported zero income in April and not much above zero in May.
Food and beverage income at current prices by type of enterprise
|R million||Jan 2020||Feb 2020||Mar 2020||Apr 2020||May 2020||Jun 2020|
|Restaurants and||Food sales||2 840||2 786||2 205||0||69||791|
|coffee shops||Bar sales||294||286||167||0||0||11|
|Takeaway and||Food sales||1 891||1 832||1 560||0||282||1 640|
|fast-food outlets||Bar sales||9||7||6||0||0||2|
|Catering services||Food sales||574||615||538||222||329||342|
|Total industry||Food sales||5 304||5 232||4 303||222||680||2 773|
|Total (including other income)||5 823||5 719||4 642||252||715||2 880|
Source: Stats SA Food and Beverage survey, June 2020
The alcohol ban resulted in zero income from bar sales in April and May from all operators in the industry. June reflected only a small recovery, with total income from all sales still 40% lower than normal.
The total loss of income in the industry amounted to more than R12 billion in the three months to end-June, compared with the three months to end-March, which was already not that good.
The figures for July are expected to show another slight improvement as restaurants and similar providers were allowed to open and sell meals, even though alcohol sales were still banned.
Land transport survey
The survey of businesses operating in the transport industry tells the same story of low economic activity, lost income and hardship.
Stats SA notes that income from freight transportation decreased by 26.8% in the second quarter of 2020 compared with the second quarter of 2019 due to a fall in the tonnage of freight that was transported, while the number of passenger journeys decreased by nearly 66% in the past quarter compared with a year ago.
The survey covers enterprises involved in land transportation and includes railway transport of passengers and freight and other scheduled passenger land transport (such as urban, suburban and inter-city buses), as well metered taxis, rental of cars with drivers and all freight transport by road.
Stats SA notes that the numbers for passenger transportation exclude minibus taxis and private cars, and freight transport figures exclude inhouse transportation.
It is noticeable from the figures that economic activity was already subdued at the beginning of the year; freight tonnage was already 7.2% lower in January than a year ago.
In April, when the pandemic had hit and the economy was shut down, freight transport volumes dropped by nearly 40% compared with a year earlier.
A table in the report that shows income from freight transportation by type of commodity shows that businesses in every sector of the economy were hit hard.
Freight transportation income at current prices by type of commodity – Q2, 2020
|R million||Apr-Jun 2019||Apr-Jun 2020||% change|
|Agriculture and forestry primary products||2 732||2 370||-13,3%|
|Primary mining and quarrying||15 615||12 107||-22,5%|
|Manufactured food, beverages and tobacco||4 379||3 479||-20,6%|
|Textile, clothing and leather goods||648||447||-31,0%|
|Chemicals, coke, petroleum, rubber and plastics||2 740||2 307||-15,8%|
|Basic and fabricated metal products||1 509||431||-71,4%|
|Electrical machinery, transport machinery and equipment||605||377||-37,7%|
|Motor vehicles, parts and accessories||853||396||-53,6%|
|Paper and paper products||303||253||-16,5%|
|Used household and office goods||529||280||-47,1%|
|Containers||2 253||1 526||-32,3%|
|Other freight||7 579||5 227||-31,0%|
|Total income||42 092||30 818||-26,8%|
Source: Stats SA Land Transport Survey, June 2020
The transport of basic metal and fabricated metal products experienced the largest decline, more than 71%, as factories were closed. The transport of motor vehicles, parts and accessories, as well as general non-metallic manufactured goods, also declined sharply as production came to a halt for weeks on end.
It is worth remembering that each of these sectors employs thousands of people, a large percentage of whom were mostly left with reduced or no income for a few months.
The land transport survey shows that seasonally-adjusted passenger journeys decreased by two thirds in the second quarter of 2020 from the first quarter. Road passenger journeys decreased by 53.5% and rail passenger journeys basically ceased totally (decreasing by 99.2%).
People couldn’t go to work or engage in any activity that would have generated income had they been working in normal circumstances.
Stats SA has scheduled the publication of few more reports this week that will probably tell the same story of hardship. These include statistics on liquidations and insolvencies, civil cases for debt and figures relating to the building and construction industry.