The BankservAfrica Economic Transactions Index (BETI) declined further in September to 131.1, notably lower than the all-time high reached just four months ago in May (143.2) and the lowest since December 2021 (130.6).

On a yearly basis, the BETI increased by 1.6% in September compared with a drop of 1.1% in August (the latter partly owing to a high base of calculation).

Of concern is that the BETI has now declined for four consecutive months, a contraction of 0.4% in September was recorded compared to 2% in August, signalling ongoing strain in the broader economy.

The ongoing contraction in the BETI, on a monthly basis, reflects the dire conditions in the South African economy during September, the payments partner indicates.

It points out that data from State-owned utility Eskom confirmed that the South African economy endured its worst-ever month of loadshedding in September, with a total of 1 503 GWh estimated to have been shed and with 572 hours of the month’s 720 hours directly affected.

Analysis by Eskom’s Research, Testing and Development department further showed that, besides 2021, there were more power cuts in September than had been experienced in any other entire year since loadshedding started in 2007.

The negative impact of loadshedding reaches all spheres of the economy, businesses and households, BankservAfrica emphasises.

It adds that the economy is also buckling under the rising cost of living (given a significant rise in fuel and food prices in recent months) and further increases in interest rates.

Cumulatively, all these factors have resulted in depressed confidence levels, fuelling emigration and discouraging potential investors, while keeping a ceiling on growth and job creation in South Africa.

The lack of economic momentum, as reflected in the BETI, has been mirrored by other local nowcasting indicators, which have also plummeted in September.

On top of local challenges, global headwinds are also gaining momentum. Global economic output contracted for a second straight month in September, according to the JP Morgan Composite PMI, adding to signs that businesses around the world are reporting the toughest conditions outside of pandemic lockdowns since the global financial crisis.

Manufacturing is being hit by rising prices, weakened demand and slumping trade, as well as a shift towards inventory reduction after the stockbuilding seen at the height of the pandemic, BankservAfrica outlines.

It says that, in the service sector, consumer-focused firms are likewise suffering falling demand owing to the cost-of-living crisis and resultant higher interest rates.

With the headwinds still rolling unabatedly onto the South African economy (latest being the current Transnet labour strike), the BETI signals the probability of an economic contraction in quarter three, BankservAfrica indicates.

“The South African economy remains woefully unable to gain synchronised momentum across all sectors in light of all the challenges, and we will continue to experience a ‘muddle-along’ scenario.

“The economic reality for South Africans has been increasingly deteriorating and could result in labour protests and potential social unrest, which the country could ill afford. Infrastructure upgrades (including road, rail, power, and water) and broader structural reforms are urgently needed to address the declining trajectory of the South African economy,” it says.

The standardised nominal value of transactions cleared through BankservAfrica in September was R1.16-trillion, while the number of transactions increased marginally to 136.2-million from 136.1-million in August.

Although showing only marginal monthly growth of 0.1% in September, the number of transactions was 11.3% higher than a year earlier.