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12 December 2018


Black Friday saved the economy in November

The South African economy grew slightly in November, according to the BankservAfrica Economic Transaction Index (BETI) which showed growth over the three measurement periods, which is most likely the result of retail sales over the Black Friday and Cyber Monday period.

“The real value of transactions grew by 0.3% between November and October and on a quarterly basis, the growth experienced was 0.2%,” according to Shergeran Naidoo, Head of Stakeholder Relations: BankservAfrica. On an annual basis, the BETI grew by 0.3%.

“Interestingly the number of real-time clearing transactions increased to over 3 million for the first time showing that this new method of paying between bank accounts is fast gaining large acceptance.”

The BETI does not account for card transactions, however, the growth shown in the BETI is linked to the major shopping days in November, Black Friday and Cyber Monday, where a total of 5.2 million in total volume of card transactions were recorded. More significant was the 55% growth in online sales for Black Friday and 36.4% for Cyber Monday.

“While on one level these show the change in behaviour of South African shoppers to online, for the BETI these reveal the growing impact of these days on transactional volumes,” says Mike Schüssler, Chief Economist at Economists dotcoza.

The actual number of transactions, as captured by the BETI, increased by 7.6% while the raw value of transactions grew by 5.6%. These indicate South Africans shopped up a storm on Black Friday after months of savings.

This is reflected in the average value of transactions which declined as retailers jumped on the bandwagon of Black Friday. The whole supply chain was put under pressure to produce bargains for retailers who then, in turn, passed on their savings to consumers, explains Schüssler.

Naidoo points out that the average value per transaction was R8 636, down from R8 801 in November 2017. These, however, include wholesale, manufacturer and transport transactions – and therefore does not represent the average value of retail transactions.

“While short-term projections are not always very accurate, we do believe that the BETI, as a nowcast indicator, is showing a slight but positive trend in three of the last four months,” says Schüssler. There are positive indications of a small change to the economy in the fourth quarter.  However, with load shedding, this may be short-lived. 

Please refer to the BETI report for additional details.



“The real value of transactions grew by 0.3% between November and October and on a quarterly basis, the growth experienced was 0.2%,” according to Shergeran Naidoo, Head of Stakeholder Relations: BankservAfrica. On an annual basis, the BETI grew by 0.3%.

Graph 1: The BETI and the SARB coincident Indicator

Source: BankservAfrica and Economists dotcoza

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Mike Schüssler has his sayMarket insights from
Mike Schüssler
Well-known economist Mike Schüssler has partnered with BankservAfrica and analyses our payment information.  Read his report for further commentary:
 

The BETI has a very good correlation with the SARB’s co-incident indicator and has an R squared of 0.95256 with no lag, coming out up to four months ahead of the co-incident indicator. (An R squared of 1 would be perfect.) The level of significance using the F distribution is higher than 97% confidence level.

The Durbin-Watson is 0.5333 which indicates that the BETI is a very good indicator of the current level of economic activity. Data dating back to the beginning of 2002 has been tested and it is believed that the BETI is a robust indicator of current economic activity.

The BETI was also tested against both overall GDP and GDP excluding agriculture. Excluding agriculture, it has an R squared of 0.97078 with GDP lagged by one quarter.

The significance of this data would be in excess of 95% and the Durbin-Watson is 0.63. (F statistic here is over 543 which, on some tables, indicate about 96% significance.)

With general GDP the BETI has a 0.9703 R squared and an even better F statistic, and a Durbin-Watson of 0.66. Again the BETI is ahead of GDP with one quarter.

The BETI is designed as an early economic scorecard which will give an overall trend in economic activity in the near term. It indicates that the economy is growing, but probably only around 3% on a year ago basis and gives us an economic scoreboard well before other data can. It is reliable and will in the future be a very important statistic on the economic release calendar.

The BETI is released on a regular basis, about ten days after month end and gives South Africans an insight into GDP growth levels.