Remuneration issues in the labour sector, combined with water and electricity supply problems, were putting pressure on the South African economy, with the BankservAfrica Economic Transaction Index (BETI) declining by 1.3% month-on-month in October, economists.co.za chief economist Mike Schüssler said on Thursday.

This was the steepest monthly decline since May 2012, while the 1.5% quarter-on-quarter decline for the three months ended September, was the weakest quarterly performance since November 2012.

“The BETI indicates that the life is being sucked out of the economy at present. The strikes in the motor industry have already led to a production loss of over 50 000 motor vehicles. Furthermore, the trade balance has declined by an estimated R12-billion as a result of the strikes,” he noted.

Schüssler added that the effect of strikes usually had a delayed impact on the BETI, as striking workers lost their wages towards the end of the month, affecting the following month more than the month of the strike.

Meanwhile, he said the overall BETI trend over the past few months seemed to indicate that economic growth was slowing rather than increasing.

“This is disappointing and could indicate that the 3% economic growth expected for next year may be a pipe dream if no improvement occurs in the last two months of the year,” he said.

Further, while recent disposable salaries, as indicated in the BankservAfrica Disposable Salary Index, may still be increasing above the rate of inflation, the available data indicated that much of the slowdown was in the production element of the economy, while consumption continued. Therefore, imports were at a higher level than exports.

Schüssler added that the effect of slower export earnings in both September and August – with a combined trade deficit of R37-billion, or 1% of gross domestic product – had hampered overall economic transactions within the country during October and after inflation.

“However, like November last year, when the BETI rose by 0.6% following poor figures in October, one can expect the BETI to show an improvement this month as well.

“We, therefore, feel that it may be a bit early to make any judgement calls on the fourth quarter, since it is possible that the November data may prove to be far more positive than that of a dismal October, as was the case in November 2012,” Schüssler concluded.