The BankservAfrica Economic Transaction Index (BETI) grew 2.1% year-on-year, the strongest growth for 17 months. The absence of major strikes so far in the first quarter and substantially below-trend oil prices have combined to boost overall economic activity, which has grown at the fastest pace since September 2013.
The number of transactions in February increased by 1.5% over the last year and the average value per transaction was up 3.9%. There were 81.2 million transactions recorded by BankservAfrica in the payments system by the different product time series captured by the BETI.
“February is a short month so one does not expect record numbers of transactions but it has certainly picked up from the normally slow January,” explains Dr Caroline Belrose, Head of Fraud and Data Analytics at BankservAfrica. “Considering the power outages and all the negativity of weaker world growth prospects, the monthly and quarter increases over the last few months have certainly been stronger than initially predicted.”
While other indicators are offering more mixed results, the BETI has the broadest and fastest view of the South African economy. There is now clear evidence of more economic activity throughout South Africa. The percentage increase from the last quarter is even more impressive, recording a 3.3% growth - the fastest since February 2013. The monthly growth was also the strongest since April 2011, at 1.8% from January to February 2015
South Africa’s GDP showed a strong last quarter in 2014 and it is now very likely that a similar growth number will be seen in the first quarter of 2015. High oil prices, the weakening Rand and commodity export prices have at least partly changed course after two years of strikes
The major trend reversal took place in September 2014 and is starting to bear fruit for the economy overall. September was also the month many returned to work from major strike action (excluding the post office) which coincided with the first major drop in oil prices.
“The longer the oil prices stay low along with the absence of industrial action, the bigger the positive effect on the South African economy,” says Mike Schüssler, Chief Economist at Economists dotcoza. “The weaker Rand is also likely to be helping marginal mines and factories remain in production, adding some stability to the growth picture too.”
Slightly more stable SA commodity export prices in the last two months may also have had a small, but positive impact on the BETI. However, the increase in oil prices and the huge fuel tax increase may still have a dampening effect on the growth performance in the future. Nonetheless the momentum of the 4.1% GDP growth in the final quarter seems to be continuing into the first quarter of the 2015 and this may enable growth of more than 3%.
As we have said before do not bet against the BETI! The latest BETI is picking up real economic activity across a whole range of sectors and that is very hard to dispute,” says Schüssler.
Contact Wendy Fourie for more information: WendyF@bankservafrica.com or (011) 497 4119.
Notes to the Editor:
The BETI stands for the BankservAfrica Economic Transaction Index. BankservAfrica is a payment enabling organisation operating between the various South African banks with a very secure messaging environment in place. Economists dotcoza is an economic consultancy that helped develop the BETI.
The BETI is a very fast and broad overview of current economic trends over a broad range of sectors, making use of economic transactions as captured by BankservAfrica. Like the Swift Index, the BETI is considered a “now-cast” number as a result of its speedy ability to convey the overall economic conditions to the market. Where most economic indicators can take anything between 38 and 76 days to become public knowledge, now-cast indicators take less than a month after the facts were revealed to come to the market.
The BETI is also the broadest of the “now-cast” indicators to come to the market, as it covers economic transactions across the whole economy. Very big distortive economic transactions do not form part of the BETI. This is also on its own a trend-strengthening indicative factor.
own a trend-strengthening indicative factor.
BankservAfrica is a payment enabling organisation which sits between the various South African banks. The organisation has a very secure messaging environment in place
Economists dotcoza is an economic consultancy that helped develop the BETI.