FINANCE: Increase In Cash Withdrawal Values
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Cash withdrawal values across South Africa – as measured by the Spark Cash Index – showed a marked increase in April 2011, as compared against both the previous month and the same period last year.
The average cash withdrawal for April 2011 was R423, a significant increase over January, February and March of this year and the third highest value on record since the Spark Cash Index was introduced.
This increase is to be expected, due to many South Africans taking long holidays over the Easter and the Workers’ Day periods, resulting in an eleven-day holiday for many and the corresponding welcome business for local retail, tourism and hospitality industries. Historically, the Spark Cash Index has always shown April to have the second largest spike in the year after the year-end December Christmas season.
What is very positive about the latest Spark Cash Index values is the marked increase in the April 2011 spike in comparison with those of April 2010 (R408) and April 2009 (R380). This 4,78% increase on previous month and 3,56% increase on previous year, despite recent hefty fuel price increases and a weak economy, is very positive and confirms an increase in consumer spending and positive consumer outlook.
Marc Sternberg, Managing Director of Spark ATM Systems, points out that the Spark Cash Index’s figures for the last few months confirm the general positive consumer spending trend.
Sternberg says, “The average cash withdrawal values for January, February and March this year were all up on the corresponding months of 2010. And in April this year, cash withdrawals were 3, 56% up on April last year. December 2010’s withdrawals were also markedly up on December 2009’s withdrawals, by 3, 03%, in fact. This is a clear indication that the South African consumer is feeling some relief after the recession of the past few years and that the effects of the 6,50% interest rate reductions are being well received by consumers with more disposable income available in the economy. With FNB’s Bureau for Economic Research showing a dip in SA’s Consumer Confidence in the first quarter of 2011 to 9 from 14 in Q4 2010, it is possible that the Spark Cash Index’s strong April shows the beginning of an uptick in Consumer Confidence.”.
Sternberg, however, does point out that the April spike was in line with expectations, and that May’s Spark Cash Index figures will be an interesting confirmation or otherwise of this positive pattern. “With such a long April Easter break as we have experienced this year, one senses that the average South African only settles down to the routine of the year after Easter. So it will be interesting to see what May and June’s figures hold for us. The general trend indicates that they should be strongly up on last year, and if they are, this will be a fairly positive confirmation of growing positive consumer optimism”, says Sternberg
The Spark Cash Index is a useful ‘real-time’ gauge of consumer spending, utilising Spark ATM Systems’ network of over 1, 200 ATM points countrywide to reflect accurate, broad and timely cash utilisation data. Spark’s ATMs are typically located in convenience stores, petroleum stations, specialist retail nodes and leisure and hospitality venues.
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