Trade conditions during December 2020 and January 2021 suffered a severe second wave of Covid-19 infections, which negatively impacted trade.
While trade conditions have subsequently improved, South African Chamber of Commerce and Industry (Sacci) CEO Alan Mukoki says these were down again in May with the Trade Activity Index (TAI) having declined to 36.
He laments that the possibility of stricter lockdown restrictions, caused by the advent of a third wave of Covid-19 infections, are weighing on trade conditions, but trade expectations are, however, still in positive territory, with 56% of respondents still positive about trade conditions over the next six months.
Mukoki notes that the prospects for employment and anticipated higher input costs were the only elements to weigh negatively on trade conditions in the next six months.
Business environment uncertainties weighed heavily on almost all elements of trade, namely lower sales volumes and fewer new orders, disrupted supplier deliveries, and higher sales prices in May.
Fewer backlogs on orders, improved inventory levels and a smaller rise but still high input costs were some positive developments that respondents reported lately.
Additionally, the greater awareness by government of the business and economic effect of the lockdown process appears to have a less inhibiting effect on trade conditions, he comments, adding that the expected improved trade conditions could be met by relative stable sales prices although the inflationary process might be fuelled from a cost push side with higher fuel prices and increased water and electricity tariffs.
Respondents listed a number of general conditions that are curtailing trade - specifically logistic transport problems at harbours, and criminal elements targeting deliveries and supplies on some main routes.
The strong rand also made local manufactured goods less competitive to imported goods, but merchandise export trade is experiencing exceptionally buoyant conditions at present, Mukoki concludes.