Trade conditions improved marginally in August and expectations for the next six months suggest further improvement is likely, the South African Chamber of Commerce and Industry (Sacci) reports.
Its latest Trade Activity Index (TAI), published on Wednesday, increased by two index points month-on-month to 42 in August, while the Trade Expectations Index (TEI) improved by four points to 46.
The seasonally adjusted TAI improved by one index point month-on-month to 43, while the seasonally adjusted TEI improved by three points to 45 in August.
"Respondents expect all trade activity components in the next six months to improve except for sales prices," Sacci pointed out.
Meanwhile, higher sales and input prices in August were the result of the tough trading conditions, which exerted more pressure on businesses to remain profitable.
The slightly lower input prices continued to put pressure on profitability and the reduced trade activity caused the backlog on orders to decline notably, although stock levels rose as supplier deliveries increased in August.
Apart from trade activity components, respondents mentioned that clients were either not honouring payments or were making late payments.
"The weak rand negatively influenced some high import propensity sectors while benefiting some exporters. The notably higher tariffs on water and electricity continue to negatively impact on trade costs," Sacci said.
The employment subindex increased from 40 in July to 44 in August.
Expected employment conditions improved, as the subindex on employment expectations rose to 43 from 36 in July.