The more stringent lockdown in December 2020 and the dampening effect it had on trade conditions, gave way to a more optimistic outlook in February and March, says the South African Chamber of Commerce and Industry (Sacci).
The Sacci Trade Activity Index improved to 49 in March, from 40 in February and 34 in January.
Trade conditions also "improved meaningfully" on the trade conditions of March 2020, with the Trade Expectations Index (TEI) increasing by not less than 13 index points year-on-year.
The improvement of trade conditions was in all the elements of trade – particularly sales volumes and new orders. Supplier deliveries also improved significantly.
Trade expectations for the next six months moved into positive territory, with the TEI improving from 40 in January to 54 in March.
"It should be noted that the more positive outlook on trade stems from the difficult situation trade had to deal with towards the end of 2020," Sacci points out.
The six-month expectations on components such as sales, orders, supplies and inventories all experienced meaningful improvements compared with the end of 2020 and January this year.
"A more business/economy friendly approach towards the lockdown process also benefitted the outlook on trade conditions," Sacci notes.
The better trade conditions were accompanied by higher sales and input prices. Although sales price rises are expected to ease over the next six months, input costs are likely to keep rising given announced fuel and electricity price hikes.
Employment conditions in trade improved to pre-December lockdown numbers. Forty-seven per cent of respondents indicated higher employment in March compared with 38% in January.
Further, 50% of the respondents expect to employ more people over the next six months.