The Don Consultancy Group (DCG) Chief Economist Mr Chifi Mhango says: “a decline in wholesale trade data reflects that demand conditions in the South African economy still weak, but likely to improve into the year.” 

“Wholesale trade sales data gives investors a closer look at the consumer economy, as wholesalers' sales and inventory numbers can be a leading indicator of consumer trends. By looking at the ratio of sales to inventories, investors can see whether or not production may grow or slow in the future. Wholesale trade data reflects output sales from key sectors such as manufacturing, agriculture, mining, publishing, and some other information industries sales to retailers, industrial, commercial, or institutional users such as governments and other businesses.” Mr Mhango emphasized 

Statistics South Africa (StatsSA) data released today shows wholesale trade sales increased by 6.6% in 2021 in real terms compared with 2020, upon a more relaxed Covid-19 trading conditions and business operating environment from the previous year. In December 2021, real wholesale trade sales decreased by 1.6% year-on-year to reach R153 billion as the fourth wave of Covid-19 disrupted trading conditions. On a monthly basis, seasonally adjusted wholesale trade sales decreased by 1.8% in December 2021 from the November 2021 total sales of R177.9 billion. 

In current terms, the data that does not exclude inflation, there is a year on year increase of 12.5% in total wholesale trade sales. The largest increases coming from Precious stones, jewellery and silverware segment wholesale trade sales, with growth rate of 612% year on year. Don Consultancy Group (DCG) 

“Within the construction and building materials segment of wholesale trade sales, which is reflecting activity in the construction sector, StatsSA data shows a year on year decline of 7.9% in current terms in December 2021 to R8.8 billion.” said DCG Chief Economist Mr Chifi Mhango. 

“The general business environment and consumer confidence conditions in the South African economy are still relatively weak to stimulate a strong demand for key wholesale goods, with recent hikes in interest rates and soaring fuel prices adding more pressure for consumer goods demand.” said Mr Mhango. 

“On the business side, concerns over resumptions of electricity load-shedding across the country, amid rising inflationary pressures due to increasing supply chain issues are also affected demand conditions. In overall, the performance of the South African economy at a sector level has not been impressive, thus not able to stimulate a strong demand for wholesale traded goods” concluded Mr Mhango. 

END