Higher interest rates saw September's Gauteng Business Barometer dip 7percent to 140 index points from the same month last year, continuing a downward trend since the start of the year.

Higher interest rates saw September's Gauteng Business Barometer dip 7percent to 140 index points from the same month last year, continuing a downward trend since the start of the year.

Standard Bank chief economist Goolam Ballim said many businesses had not yet felt the full squeeze of higher interest rates, but they would by next year.

Retailers of durable goods such as electronic and household equipment, have already felt the pinch as annual growth rates in this sector of the retail market have slipped from near 25percent at the cycle's peak.

"Durable goods represent about 20percent of total retail sales and I expect sales growth will drop to near zero imminently. It is possible that this segment may experience negative annual growth, as the automotive market is experiencing.

"This declining trend in the durable goods market is masked by the buoyant performance of other segments of retail sales, such as semi-durable and non-durable goods and services.

"The slowdown can be seen as a soft landing. Nine years ago we experienced a hard landing when interest rates were hiked from 18,25percent to 25,5percent over four months. The current interest rate cycle is more measured and the experience is not as punishing," said Ballim. - Staff Reporter