The SCI revealed a month-on-month increase of 7.30% to R439.68 at farming locations in SA.
According to Ryan Tzamtzis, Operations Manager of Spark ATM Systems, farming locations also continued to record the highest year-on-year growth of 23.53%. "The month-to-month increase and consistent year-on-year increases recorded at farming locations can be attributed to the recent 52% wage increases in the agricultural sector, which went into effect in March 2013.
"The agricultural sector has also recently had its harvesting season, which often results in additional farm workers being employed to compensate for the increased workload or current employees being paid overtime providing them with more cash flow."
With regard to the national month-on-month ATM activity, which increased slightly by 0.62% to record an average cash withdrawal value of R464.52, Ronel Oberholzer, Principal Economist: Sub-Saharan Economics at IHS Global Insight, says that this small increase is in line with the ATM withdrawal activity trend identified after April's decline which revealed a month-on-month decrease of 0.73%. "A decrease one month is typically followed by an increase in the following month."
However, she says that on average, consumer spending and cash withdrawals remains at the same level. "What has been encouraging for the economy though is the year-on-year trend staying positive and in an upward direction."
Tzamtzis predicts that the remaining SCI results for 2013 should continue to stay in the lower digits as consumers hold off on excess spending in anticipation of tough financial times ahead. "Consumers are facing increases in food, electricity, and transport costs with recent reports indicating that the petrol price could pass the R13 a litre mark, which will put added strain on the consumer."
With regard to the national month-to-month average being slightly up in May, he says that some consumers across various sectors may have also received wage increases towards the end of the month, which may have marginally increased their spending power. "This could contribute to positive cash withdrawal averages going into June, however, the effects of a weak rand remain to be seen."
KwaZulu-Natal reported the biggest provincial average cash withdrawal value of R485.33 for May 2013, followed closely by Mpumulanga (R484.19) and the Eastern Cape (R482.56).
Gauteng province recorded the largest month-to-month withdrawal growth of 2.69%, while KwaZulu-Natal revealed the second highest month-to-month increase of 1.98% and the third highest year-on-year increase of 10.07%. "Both Gauteng and KwaZulu-Natal both have a large metropolis, and both have a steady stream of jobseekers flocking from various areas of South Africa. The high increases in both provinces are leading to the increased average withdrawals nationally," says Oberholzer.
Tzamtzis adds, "When retail sales increase, the data is usually reflected in average cash withdrawals in Gauteng, KwaZulu-Natal and the Western Cape. However, Mpumulanga recorded the second highest cash withdrawal average, and actually has the highest average withdrawal over the last two years, which is an indication that some structural developments are occurring in that province."
"Mpumulanga is both a rural province - to which remittance income is sent - and a mining province, where labourers have a high propensity to spend cash, so the province should continue to produce high withdrawal rates," adds Oberholzer.
According to the May 2013 SCI statistics, wholesale locations recorded the highest average cash withdrawal value for the fourth month in a row at R476.57, while petrol stations recorded the second highest cash withdrawal value of R470.87. "The month-to-month decrease of 0.25% in cash withdrawals at fuel sites could be attributed to a decrease in fuel prices, but has not dropped significantly due to the presence of convenient shopping facilities at some of these sites," says Tzamtzis.
The locations that recorded the highest month-to-month increases after farming (7.30%) were wholesale (0.92%) and retail (0.68%) sites. "The slight increase in these other sectors is attributed to increasing costs, which has staved off significant cash withdrawals and consumer spending. This is indicative in leisure and petrol sites which recorded month-to-month decreases of -1.37% and -0.25% respectively," he says.
*Retail sites includes supermarkets, convenience stores, fast food outlets, pharmacies, hardware stores, liquor stores and butcheries.
