November uptake on SCI reflects return of strikers
6 Dec 2012 13:04
The average cash withdrawal values across South Africa for November 2012 was R442.71, a positive month-on-month growth of 0.78% in average cash withdrawal figures from October's R439.27, as measured by the Spark Cash Index (SCI). This follows a month-on-month drop of 2.27% in average cash withdrawal figures for October 2012, fuelled by the strikes in the transport and mining sectors.
According to Marc Sternberg, MD of Spark ATM Systems, the return to work of striking mineworkers following their salary increase and needing to stock-up after 2-3 months without pay, appears to have positively impacted cash withdrawal activity throughout the country in November.
"This is highlighted by the rise in average cash withdrawal values at wholesale locations, which recorded a month-on-month growth of 1.36% and year-on-year growth of 16.96%. Spaza shop owners, stocking up ahead of the Christmas season rush, have also likely boosted ATM withdrawal values at wholesale locations."
Economist confirms trend
However, Ronel Oberholzer, principal economist at IHS Global Insights, says that average cash withdrawal values in November were somewhat dampened by the ongoing strikes in the farming sector. "The SCI data noted a month-on-month drop of 2.70% at rural locations, which points to the negative impact that the strikes in the farming sector are starting to have on cash withdrawal activity.
"Many of the farmworkers are seasonal migrant workers who spend their money before they return home, so if they lose their wages, they obviously do not have the disposable income to use, resulting in the decrease in ATM withdrawal activity recorded at these locations."
Provincial cash withdrawal trends
For the tenth month in a row, the Mpumalanga province recorded the highest provincial average cash withdrawal value (R475.75) for November 2012, followed the Eastern Cape (R465.11) and KwaZulu-Natal (R460.30) provinces.
"By reviewing the regional SCI data, it is clear that the economic effects of the farmworkers strike action in the Western Cape are being felt as this province recorded the lowest average cash withdrawal value of R391.48, revealing that the loss of income has already begun to impact buying power in this province," says Sternberg.
He expects cash withdrawal values to continue their upward trend in the final month of the year. "Historically, December ATM cash withdrawal values reveal the highest month-on-month growth for the year, due to increased spending over the festive season. We expect 2012 to be no different. Workers usually get bonuses and people are typically more willing to spend more money while they are on holiday. In addition to this, many workers go home to visit family for the holidays and draw cash to take along."
Site category trends
Wholesale locations came out tops for the eighth consecutive month by posting the highest average cash withdrawal figure of R456.30, in addition to the largest month-on-month increase of 1.36% and year-on-year increase of 16.96%. Farming sites recorded the second highest value of R442.39, despite showing a 2.70% decline in withdrawal activity month-on-month, followed by petrol sites with a value of R439.38, which also recorded a 0.15% drop month-on-month.
"The recent high petrol prices may have resulted in consumers becoming more conscious of their fuel consumption and perhaps even taking part in carpooling initiatives, hence the slight month-on-month drop noted at petrol sites. However, the upcoming easing of petrol prices and increase in local travelling over the festive season is likely to result in a boost in withdrawal activity for petrol sites as consumers fill up on petrol and stock up on food supplies ahead of road trips," says Sternberg.
The SCI is a useful 'real-time' gauge of consumer spending, utilising the company's ATM systems' network of over 2000 ATMs located countrywide to reflect accurate, broad and timely cash demand and utilisation data. These ATMs are typically located in convenience stores, petroleum stations, specialist retail nodes and leisure & hospitality venues.
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