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Wholesale Trade and Retail Sales: Construction Materials September 2024

Retail sales of hardware materials continued their downward trend, recording a 4.2% year-on-year (y/y) decline in September 2024. This brought the third quarter’s performance to 3.2% lower than the same period in 2023 and a 1.5% decrease for the first nine months of the year in nominal terms. These figures compare unfavorably with a 5.1% increase in total retail sales for the third quarter and a 5% rise over the nine-month period.

Hardware stores remain one of the weakest-performing sectors in retail trade sales. At the wholesale level, sales are also underperforming, though wholesale trade sales of construction materials align more closely with the overall sluggish wholesale market. Wholesale sales of construction materials fell 6.1% y/y in September, compared to an overall wholesale market decline of 7.5%. For the third quarter, construction material sales dropped 6.6% y/y and by 7.4% y/y over the nine-month period.

The 25 basis point interest rate cut announced by the South African Reserve Bank in September 2024 appears to have had minimal immediate impact on the DIY market, which is largely consumer-driven and reflected in retail sales. However, lower interest rates are expected to gradually improve conditions for increased hardware store sales, with potential gains becoming more evident in the lead-up to December.

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