Johannesburg - According
to National Treasury, the gross domestic product growth rate is forecasted at
an estimated 1.3 percent for 2017. The outlook points to a tough year ahead for
business; however, there are a few trends that promise a positive narrative for
businesses during the year.
“It isn’t all
doom and gloom: Yes, the economy is slowing - however businesses that want to
gain any wins in the market place in 2017 will have to operate in a more astute
manner” says Dr Yudhvir Seetharam, head of Analytics at FNB.
Seetharam shares
his outlook on a few trends in various industries that SA can expect in 2017.
Growth in the
pre-owned car market spurs on SMEs in related markets
The new car
market will most likely continue to slow in 2017 as cash strapped consumers
continue to opt to keep their cars. The saving grace for this sector will
ultimately come from the pre-owned and spare parts market, and through it we
are likely to see an increase in sales from businesses that sell tyres, spare
parts and batteries as consumers look to stretch their rand.
Fast-food
uptake
Fast -food
franchises will likely experience growth as more consumers will opt to buy
takeout over the traditional sit-down restaurant as the price tends to be more
favourable.
Tourism to
continue growing
South Africa has
remained a popular luxury destination for many international travellers;
especially as it offers a world class experience from shopping to pristine
beaches and unforgettable safari’s at a fraction of the price.
A weaker rand
makes for a favourable exchange rate for foreign tourists travelling to South
African. Locals who would have otherwise travelled abroad, will most likely
travel within the country creating a greater income stream for tour operators,
transport, hotels, bed and breakfasts. .
Increased use
of the eCommerce platform
With an increase
in the number of people with accessibility to the internet and a population
that is becoming more digitally savvy, we are bound to see more online
solutions. Today’s digital consumer prefers to make their purchases and do their
business online.
Agricultural
sector to stabilise
The past year
for most farmers was a challenging year due to the drought conditions our
country experience. With a 75 percent likelihood of a La Niña weather
phenomenon, the much needed rain will bring relief to the sector. If the
rain is consistent, we will see a normalisation in crop production. The meat
market may still add to the food inflation but with good rains, we may see a
general decrease in overall food inflation.
Read also: 'Economy needs radical transformation'
The latest
Business Confidence and Consumer Confidence Indices indicate that South African
consumers and businesses have similar expectations; consumer confidence has
increased marginally, but it still below historic averages. This implies that
while consumers have a slightly more positive outlook on the economy, their
spending patterns are likely to remain unchanged. In contrast,
Business Confidence, in the motor and retailer sectors has dropped, indicating
that these businesses expect dampened sales and profits over the short term.
“2017 will no
doubt be a trying year for SMEs across all industries, but with a recovering
world market, and a Rand that is finding strength, we should start to see an
upward trend towards the end of 2017 – hopefully the worst is behind us” says
Seetharam.
Adapted from a
press release.