Seifsa encouraged by uptick in building material sales, but fears its derailment
Wholesale trade sales data released by Statistics South Africa (Stats SA) shows an increase in sales of 31.3% year-on-year in May, to R158-billion in constant terms.
Month-on-month, sales increased 6.3% from April. Year-to-date, wholesale trade sales have increased by 14.5%.
Sales of construction and building materials increased to R13-billion from R11-billion in April, with expansionary year-on-year growth of 115.9% in May.
The Steel and Engineering Industries Federation of Southern Africa says the improvement in sales of construction and building materials is encouraging amid the challenging environment.
Within the Metals and Engineering (M&E) sector, the increase in the sale of construction and building material was driven mainly by the increase in the demand for building supplies across all segments including nonferrous metal products, basic iron and steel products, as well as other fabricated metal products.
Chief economist Chifipa Mhango says the figures are a sign that economic recovery in South Africa remains on track, while trading and industrial production activity levels are improving.
However, the prevailing unrest in the country threatens to halt this progress as it has disrupted supply chains across all sectors.
Mhango appeals to government to urgently mobilise all its resources to ensure stability so that economic recovery is not derailed.
“Our revised indications suggest that if the unrest continues further, production and sales of products within the M&E sector will be affected, as road freight transport, which is a core element of input supply, has been massively disrupted, thus negatively affecting the current positive trend in construction and building material sales,” he states.
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