SOUTH AFRICAN ECONOMY

December 2006.

South African consumers are likely to have shortages of all sorts of goods soon, as local manufacturers are sadly failing to keep up with record breaking demand in the stores.

Retail sales, across the board, in the first 9 months of 2006, were 9.9% higher that the same period last year. Even with 3 interest rate hikes in 2006, these are unlikely to slow things down until probably early 2007 and as we all know the 4th quarter of any year is always over heated by Christmas manic buying.

Car sales are always a good indicator of how an economy is doing and currently there are an incredible 43,500 cars being sold per month, which amazingly even out strips the monthly population growth rate of 41,000. This rapid buying of cars has lead some experts to predict that if this continues, then South Africa could face petrol shortage within 18 months, unless refineries step up production. It is not unheard of for South Africa to have petrol shortages, with the last Cape Town shortage lasting 4 days in mid 2006. Panic buying at the pumps also didn’t help matters either.

In mid December 2006, there was a shortage of canned soft drinks in South Africa, as there was a shortage of carbon dioxide (CO2) from suppliers. So Coke Cola and other producers had trouble keeping supplies of soft drinks available in the shops for the Christmas party season.

Food has been another area, with vegetables like Celery and Coriander being rare and in very short supply. Weird, but true.

When the Cape Town area had electricity black-outs in the winter of 2006, generators, candles, gas canisters and other cooking, lighting and heating equipment sold out in record breaking times. There was even a week of shortages of gas for gas canisters as refineries could not keep up with demand.

The Rand has suffered over the last quarter of 2006, with exchange rates with the US dollar hitting highs of R7 to the $, R14 to the UK£ and R10 to the Euro. This has been marvelous for the tourism sector, as many more tourist have arrived in South Africa to holiday and spend, but South African exports have sadly taken a slight nose dive in some sectors.

 

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