Retailers report no strike impact

"If anything credit and debit card swipes are showing upward movement, so it would seem that many of those on strike are spending time shopping with little fear of the consequences of no-work, no-pay on the bottom line," said Paul Kent, managing director of SureSwipe.

He added that SureSwipe had initially been surprised at the statistical data it examined for August consumer spend, having thought that such a large strike would have a negative impact, but as it began analysing data and speaking with retailers SureSwipe realised that there still seems to be residual optimism following a successful World Cup.

Strikes upsetting to many, but...

"Although the strikes have been upsetting for many, there appears to be a sense that this is part of the normal labour relations process and there is confidence that an appropriate solution will be found," said Kent.

In addition to a generally buoyant time for small and medium businesses, the sector SureSwipe focuses on, business in the credit and debit card swipe industry showed steady and confident growth.

"It would tend to indicate that although the financial crisis is far from over globally, there is a sense that the tight hold on credit last year was harming economies and there needs to be a somewhat freer rein to boost job creation and economic growth," said SureSwipe.

Kent said that it seemed likely that stronger figures were echoing what happened in the last three months of 2009 when South African consumer spending increased for the first time in six quarters in the final three months of last year as wages increased and job losses eased.

"There have been improvements in key indicators this year like vehicle sales and property prices, and the consistently strong consumer spending we have seen over the last two to three months bodes well for the economy," he added.

Positive outcomes are vital

SureSwipe said it was critical that positive outcomes emerged from the public sector strike, not only in terms of wages but working condition demands, which hold important ramifications for the private sector.

"As we head toward local government elections next year there is likely to be increased politicisation in workforces and this could depress productivity and growth," said SureSwipe.

SureSwipe cited Morgan Stanley's example of Germany mentioned in a report at the end of August.

"Germany saw stronger than expected consumer spending in the second quarter of this year, while consumers had been holding back on big-ticket items thus far, they were confident enough to reduce their savings.

Shorter working week

What seems to have had a positive impact was the German approach to tight economic conditions and potential job cuts, instead of slashing jobs they imposed shorter working weeks in consultation with unions," the report said.

The report also noted that during the crisis, the German labour market held up well as companies asked employees to go part-time instead of letting them go, this labour hoarding is partially down to the short shift subsidies, which at the peak were paid out to 1.534 million workers, and partially down to concerns by companies about talent availability.

"These findings from Germany and the surge in spending and business confidence during the World Cup are thought-provoking, they tend to indicate that when people feel confident and happy, they perform better at work and spend more helping the economy to grow," concluded Kent.