THE number of economic transactions — such as payments for goods and services — taking place in the economy declined in January, indicating a slow start for economic activity and growth this year.

The weak rand and drought were among factors influencing slowing economic activity.

The BankservAfrica economic transactions index (BETI) fell slightly to 126.2 in January from 126.7 in December and was also down on a quarterly basis. A total of 78-million transactions amounting to R640.9bn were recorded in January compared with 89-million transactions amounting to R784.6bn in December.

Lower economic transactions indicate slower spending by households and thus weak economic growth.

"The slowdown is now not only well-established but most recent quarterly and monthly changes are indicating (that) further declines are increasingly likely," Economists dotcoza chief economist Mike Schüssler, whose company helps compile the BETI, said.

The latest index supports widespread views that economic growth will slow further this year, to below 1% from an estimated 1.3% last year.

While it was certainly too early to say that SA was in recession, the number and value of transactions showed a sustained slowdown over most of 2015 and also over the last few months, indicating that the economy was weak, BankservAfrica said.

Transactions also fell, possibly due to January’s ending on a Sunday, meaning some month-end transactions may have been delayed to the beginning of February, Mr Schüssler said.

BankservAfrica is a payment enabling organisation operating between the various South African banks.