Retail sales have recovered strongly in the second and third quarters of 2010 and are expected to have reached around 7% year-on-year in the fourth quarter of last year, according The Economic Overview – January 2011, compiled by Eco Quant economist Christo Luus.

The report reveals that some pullback may occur in early 2011 but, unless the recovery stalls significantly, retail sales growth should remain in positive territory (between 6% to 8% year-on-year) during 2012.

The quarter-on-quarter economic growth rate figure slowed further in the third quarter to amount to 2,6% at a seasonally adjusted annualised rate, compared with the 4,6% and 2,8% recorded in the first and second quarters of 2010 respectively.

Of the major sectors, mining grew the strongest, at a seasonally adjusted annualised rate of 28,1%, whereas agriculture (at 16,3%) also performed well. The wholesale and retail sectors rose by 3,3%, but the manufacturing sector shrank by 5%.

The decline in manufac- turing production during the third quarter was mainly as a result of strikes that crippled certain subsectors, such as vehicle manufacturing, at times. “It is a little surprising that unions saw their way clear to endangering the shaky economic recovery in 2010, and to indirectly contribute to the likelihood that manufacturers will gradually switch to more capital-intensive production methods.”

The latest retail sales figures show that total real retail sales were up by 6,1% year-on-year in November last year. Real retail sales growth increased throughout 2010 after an entire year of negative year-on-year growth was recorded.

By the end of last year, the only category of retailers still recording negative real growth was hardware, paint and glass merchants (those retailers specialising in supplying the building and construction sector and those catering for the home improvement market), which showed a decline of –0,7% year-on-year.

Specialised food, beverages and tobacco merchants were showing economic growth of only 0,6% year-on-year.

In contrast, pharmaceuticals, medical goods and toiletries merchants, together with merchants of household furniture, appliances and equipment, recorded real sales growth of more than 17% year-on-year. Textiles, clothing and footwear retailers also recorded strong real sales growth of 9,2% year-on-year.