South Africa's wholesale sales climbed for the second straight month in December, preliminary figures from Statistics South Africa showed last week but retail slowed after a strong November.

Wholesale trade grew an unadjusted 3.9 percent year-on-year in December, faster than the 2.4 percent rise in November. On a monthly basis, wholesale sales rose 2.6 percent from November, when it deceased by 0.7 percent. It was the first increase in three months.

At current prices, the annual sales growth accelerated to 11.0 percent in December from 9.1 percent in the prior month. This growth was mainly driven by higher sales of machinery, equipment and supplies, other household goods except precious stones, agricultural raw materials and livestock.

But the country's December retail trade sales expanded just 0.9 per cent year-on-year (yoy), more or less in line with expectations but this followed a record November where analysts say Christmas shopping began on Black Friday. November saw a revised increase of 3.1 percent, data from the statistics office showed

Clothing sales were the dominant driver of the expansion, growing at 10.5 per cent yoy despite stricter tougher credit restrictions in the republic. Food and beverage sales also rose 7per cent yoy, while pharmaceutical and hardware sales registered growth of 2.1 and 4.1 per cent respectively. obe fall was in furniture sales, which declined 6.2 per cent, offsetting much of the impetus from the semi-durables sector.

On a month-on-month basis, sales fell by 2.3 percent and edged up 1.3 percent in the three months to December compared with the same period last year, Statistics South Africa said.

Varying performances across the segments continue to reflect household strain, with consumers seemingly opting to purchase clothing as gifts, rather than more expensive durable goods. Based on today’s number, retail GDP is expected to have expanded 1.1 per cent in 2016, adding 0.2 per cent to GDP growth.

Forecast for 2017 is for a modestly better year for South African consumers, with interest rates set to remain steady, and inflation to drift lower and back below the 6 per cent by the end of the year.

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