The official numbers for notes in circulation at 30 September, as well as new vehicle sales for September 2011 have been reported, allowing us to update our Hard Number Index (HNI) of the state of the SA economy. According to the HNI, economic activity in SA maintained its faster momentum in last month, at more or less a satisfactory constant speed as we show below. Given that many commentators had been expecting decelerating growth, this outcome must be regarded as good and encouraging economic news. The SA economy has, according to our HNI, headed in the direction of faster rather than slower growth in the third quarter.
We had noted in our previous report that the supply of and demand for notes had picked up momentum in August. The note issue is a very good indicator of spending intentions by consumers and one that is particularly useful as an economic indicator because it is so up to date. The growth in demand for notes continued to increase in September with actual growth rates now well above 10% p.a with the growth trend accelerating rather than decelerating. These growth numbers, when adjusted for inflation, are also revealing a marked upward bias. SA households would appear to be willing to increase rather than rein in their spending.
New vehicle sales in September also revealed a robust growth trend. The growth trend in new unit sales, which had weakened in the second quarter, has reversed course very decisively. On both an actual and seasonally adjusted basis, new vehicle sales have headed higher. Also encouraging is that export sales have remained very strong at nearly 26 000 units sold while the demand for commercial vehicles, particularly heavy vehicles, is showing especially strong growth. This indicates a willingness of SA business to add to its capacity to produce goods and services. Brian Kantor
