SIZWE NXEDLANA: Wary consumers in no rush to spend big
It's clear that South Africans are cutting back dramatically in these difficult times
THE South African economy has a long history of the tertiary sector (consumption side) being a resilient pillar of growth, but this long, unbroken run was shattered with the release of the GDP figures for the first quarter of the year. The numbers showed that the sector contracted by a full 2% quarter on quarter. The collapse was the result of every industry in the sector shrinking, but the most notable figure was the 5.9% collapse in the retail and wholesale trade sector, which reflects just how weak household consumption is. Household consumption expenditure dived 2.3% quarter on quarter, with spend falling significantly on food and nonalcoholic beverages (-3.4%), alcoholic beverages and tobacco (-7.4%), clothing (-12.1%), recreation (-8.5%), and restaurants and hotels (-8.6%). It's clear that South Africans are cutting back dramatically in these difficult times. To find a comparable period in the history of the tertiary sector's performance, we have to go back three decades, to t...
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