Retail trade sales for September 2008 decreased by 5% at constant prices, compared with September 2007, Statistics South Africa said on Wednesday.
Retail trade sales for the first nine months of 2008 reflected a decrease of 2,1%, at constant prices, the Pretoria-based agency added.
Tougher economic conditions continued to affect consumer spending, Nedbank said after the release of the data.
”Consumer spending is unlikely to improve in the short term. Household finances will remain under pressure over the next six months or so as interest rates remain high and uncertainty increases ahead of next year’s general election, and job security is increasingly threatened by global recessionary conditions.”
Nedbank said the slowdown in household spending had already become relatively broad based, with growth in most categories of goods slowing sharply over the past months.
However, retailers of durable and semi-durable goods ”will feel the most pain, but sales of non-durables are also expected to slow significantly”.
According to Nedbank, the latest retail sales data was additional evidence of the continued effect of tougher economic conditions.
”A weaker domestic economy, global recessionary conditions and the downward bias of the major technical changes to the CPIX index should push inflation lower in the months ahead, creating scope for a softer Monetary Policy Committee stance.
”While potential rand weakness remains a worry, the local and global environment looks increasingly deflationary..”
Nedbank said that as a result, the first cut in interest rates was likely to be in April 2009, followed by three more of a similar margin before the end the year.
Increasingly, the risk to interest rates appeared to be on the downside.
”Rates could come down sooner and by more than is generally expected.” — Sapa