South African retail sales jumped in November by their biggest margin in more than five years as sales in clothing, footwear and furniture rose, helping the rand ease earlier losses as the economy showed further signs of recovery.
Retail sales contracted in the first months of 2017, weighed down by consumer confidence sliding to record lows last year as political uncertainty and inflation cut discretionary spending,but have since recovered. They rose by 8.% year-on-year in November and by 4% a monthly basis.
The year-on-year figure was the largest jump since June 2012. Analysts polled by Reuters had forecast a modest 3.1% year-on-year increase.
The acceleration was driven by higher sales in the textiles sector which jumped 12.4% year-on-year from 5.6% in the previous month, and a rise in sales of household furniture and appliances by 14.1% year-on-year.
The rand responded by erasing some of its earlier-losses, trading at a session best of 12.2875 after the data was published compared to 12.3200 just before the releases.
Political and policy uncertainty have hobbled business and consumer confidence for most of last year, but is seen returning after the ruling African National Congress’s (ANC) leadership battle concluded in victory for Cyril Ramaphosa, viewed as pro-business.
Expansion in the manufacturing and mining sectors have also fueled hopes of better than expected economic recovery following the recession in the first quarter of2017.
The treasury said in October it expected gross domestic product growth of only 1.1% in 2018, much lower than the 3-5% annual growth targeted by government and needed to cut rising poverty and unemployment.
Watch related videos: