March holidays boots SCI results

According to Ryan Tzamtzis, operations manager of Spark ATM Systems, this jump is significant as it is the second highest average withdrawal value recorded by the SCI since its inception in January 2007. "The combination of public holidays, major religious festivals - including Passover and Easter - and the beginning of school holidays, all falling into the same month, resulted in consumers increasing their spending, especially on entertainment and travel."

In addition, March is also the beginning of the financial year for many companies, resulting in employees often receiving pay hikes and bonuses, which tends to boost spending on luxury goods and services.

However, he says this boost does not necessarily point to consumers being financially better off, as an increase in the overall price level plays a role. "Prices are on their way up, so the figure partly reflects higher prices of cost of living as well as spending."

Economist's view

Ronel Oberholzer, principal economist at IHS Global Insights, says that while public holidays do provide a short-term boost to the economy, they do not necessarily provide long-term benefits.

"Consumer spending is an extremely important driver of growth as it makes up 60% of the economy. However, to grow the economy's potential, production is needed. Therefore, a 'break' in production because of public holidays is viewed as negative to the economy over the medium to longer term."

"Historically, the SCI data typically reveals a boost in ATM withdrawal activity over the March/April period with the next major jump to be expected around the June-July school holidays," adds Tzamtzis. "Therefore, a decline in ATM withdrawals will most likely take place over the next two months, with a likely bounce back in June."

Provincial cash withdrawal trends

The Mpumalanga province recorded the highest average cash withdrawal value (R488.44) for March 2013, followed by the Eastern Cape (R487.94) and KwaZulu-Natal (R484.50) provinces.

The Eastern Cape, Mpumalanga and Limpopo typically have higher withdrawal amounts due to the remittance income that flows from the metro areas to the rural provinces, says Oberholzer. "People are simply withdrawing money that was transferred to them."

However, she says these types of rural regions often receive a different kind of boost over holiday periods because the same people that send remittance income home also visit their homes over the holidays. "Of all tourists that visited Eastern Cape in 2011, for example, 71% of them were visiting friends and family."

Site category trends

Wholesale locations recorded the highest cash withdrawal value (R479.75) while petrol sites came in with the second highest average cash withdrawal value (R468.75) followed by retail sites (R455.12).

Tzamtzis adds that the increase in ATM activity noted at wholesale sites could reveal that shop owners, who source their goods from wholesalers, stocked up on supplies ahead of the long weekends in anticipation of the increase in consumer spending.

He says a combination of the petrol price increase and more people travelling over the school holiday season could have contributed to the growth in ATM withdrawals at petrol sites. "It is interesting to note that the increase in withdrawals is higher than the increase in petrol prices, which indicates that people were probably withdrawing money for spending on things other than petrol when they stopped at petrol stations. It could also mean they were putting more petrol in their cars in anticipation of holiday journeys."

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.

For more information, go to www.sparkatm.co.za.