The South African Chamber of Commerce and Industry’s (Sacci’s) seasonally adjusted six-month trade expectations index (TEI) declined from 61 in February to 51 in March – the weakest level since April 2016.

The non-seasonally adjusted TEI weakened even more markedly and declined from 63 to 51 month-on-month.

The TEI had been on a strong path of recovery from May 2016 up to February, but, owing to extraneous events, all components of trade expectations were severely and negatively affected in March.

Forty-four per cent of the responses for the March survey were received before the March 24 recall of the former Finance Minister Pravin Gordhan in a Cabinet reshuffle.

“The survey may, therefore, not reflect the full short-term impact of the political developments of the last few days of March. The subsequent downgrade to junk status by Standard & Poor’s and Fitch will also have longer-term repercussions for trade conditions,” Sacci said in a statement.

Respondents indicated that financial stress, political and economic policy uncertainty, leadership in government, perceptions of corruption, and a tighter export market, were some of the main causes for the weaker trade conditions.

The seasonally adjusted trade activity index (TAI) also weakened in March to 43 from 46 in February. This is the weakest monthly level since February 2016.

The non-seasonally adjusted TAI was down from 48 in February to 46 in March and was two index points lower year-on-year. “The progress in trade conditions that had been experienced on a year-on-year basis from December 2016 to February, appears to have been interrupted and may take time to recover,” Sacci said.

The sales volumes index decreased from 56 in February to 52 in March, while new orders dipped by one point to 43. The inventory index stalled at 40 after increasing to 48 in February.

The selling price index increased to 61 from 52 and the input price index rose to 63 from 51 suggesting that more inflationary pressures returned in March. Henceforth, the inflationary expectations indices remained high at 71 and 75 respectively, for the selling and input price indices.  

The employment subindex improved slightly month-on-month, from 45 to 48, as the political turmoil was too close to month-end to have an effect.

However, the employment outlook in the trade environment for the next six months is a cause for concern as the employment expectations index dropped from 50 to 43.