Consumer Watch – June 2020

Economic and consumer indicators reported in June were mostly negative. Vehicle sales resumed in May with deflated volumes, only 12 932 units were sold (-68.1% y-y). The ABSA PMI gained 4.1 points to 50.2 points in May, exceeding 50-points for the first time since July 2019. Nominal food and beverage sales contracted by -26.1% y-y in March driven mainly by the lockdown. CPI inflation fell -110bps to 3.0% y-y in April, while PPI inflation dropped -210bps in April to 1.2% y-y. The low PPI inflation suggests further CPI inflation declines are likely for May and June.

Fuel prices increased, with coastal petrol and diesel prices increasing by 172c/litre and 173c/litre to R14.42/litre and R12.43/litre respectively in July 2020. The rand was steady on a m-m basis (+1.1%), however remains weak on a y-y basis (-18.8% y-y). The rand ended the month of June at R17.36/USD, close to the month’s average of R17.12/USD. SA’s Q1 GDP growth was -2.0% y-y, setting the tone for the economic recession expected in 2020.