‘Record’ consumer confidence filters through to freight industry

First two months reflect 38% increase in imports IN THE latest index produced by First National Bank (FNB) and the Bureau for Economic Research (BER) in Stellenbosch, consumer confidence has peaked, rising five points to an all-time high of 23 points. And the continuing increase in consumer spending is reflected in rapidly rising import totals, and improving business for the freight industry. The latest trade data, for the first two months of the year, show a 38% increase in imports over the same period last year, according to André Erasmus, senior manager of trade and customs consultants, Deloitte. The main increase was in imports from Europe, followed by those from Africa and Asia. Erasmus also noted that capital goods imports were also on an upward trend, suggesting manufacturing confidence in SA and investment in capital equipment, with increased local production in mind. This has definitely filtered through to the forwarding industry, according to Gerald Rowe, MD of forwarder a.hartrodt. “There has been an obvious business increase since last September,” he told FTW, “and, for this normally quiet period of the year import trade is definitely up.” And, looking at his company projections, he saw this carrying on for the next few months. Richard Mallabone, MD of Expeditors International, agreed. “In the first quarter of this year,” he said, “imports were certainly on the increase, and looking strong. “The cycle is definitely up on last year, and the future outcome looks good.” FNB chief economist Cees Bruggemans saw lively demand fuelling growth, and expected this growth to continue to climb. Consumers are correct in holding the belief that the country’s growth prospects are far from over – with the fixed investment prospects, employment growth and a sound asset market seen as reasons for the growth. But, while things have been looking very rosy to consumers in recent times, Standard Bank group economist, Goolam Ballim, offered a few words of warning. The index, he told FTW, was certainly true for data up to February, but things could tighten up just around the corner. While the lower oil price and reasonable exchange rates may have made people feel good, Ballim said he would be very careful about carrying this forward. For example, durable goods sales are already down and oil price movements are threateningly on an upward spiral. “This could all lead to the tightening of SA monetary policy,” Ballim added.