The data, released on Wednesday by Statistics South Africa (StatsSA), went against the consensus of another decline. But the 2.3% annual rise, after 10 months of decline, should not have come as a complete surprise. 

In late March, we reported that the latest BankservAfrica Take-Home and Private Pensions report, calculated by Economists.co.za, suggested there could be a consumer rebound from a boost in pensions in February.

“The total nominal increase for all deducted money flowing into bank accounts of workers and private pensioners was 9.2%. This should result in a good consumer expenditure reaction for the South African economy for at least February,” the report said. 

This forecast has now been confirmed by the data, which also revealingly showed a 6.9% month-on-month increase from January.  

“It might not be quite the same bounce going forward month on month, but the year on year numbers from March to July are going to be astronomical because of the base effect from last year’s initial lockdowns,” Mike Schussler of Economists.co.za told Business Maverick.

The biggest driver of the year-on-year increase was in sales of household furniture, appliances and equipment, which climbed a crisp 17.3%. This was followed by sales in textiles, clothing, footwear and leather goods, which had a solid 12.3% bounce. These are the kinds of items that households typically buy when a bit of disposable income flows their way.

Other factors have also been at play.

“We suspect that increased mobility and the reopening of schools in the month of February would have supported demand for clothing. Food and beverages volumes also rebounded strongly, recording growth of 8% year on year, reflecting pent-up demand induced by the lifting of liquor sales restrictions,” FNB senior economist Siphamandla Mkhwanazi said in a commentary.

The economy still faces plenty of challenges. The Reserve Bank’s biannual Monetary Policy Review, also released on Wednesday, noted that:

“Growth in the first quarter of 2021 is… projected to disappoint.

“Although the economy has recovered faster than expected thus far, the labour market remains subdued.”

Still, a nice bounce in February in retail sales may mean that the widely expected contraction in the economy this quarter might not be as steep as anticipated. It should also reflect in the results of some listed retailers. DM/BM