Trade conditions continued to improve in January after an uncertain second half of 2021 and, when seasonal factors are considered, trade conditions are on an upward trend, the South African Chamber of Commerce and Industry's (Sacci's) latest Trade Conditions Survey shows.
The disruption and mayhem in July 2021 had a negative impact on trade, but it also accelerated the recovery and inspired resilience in communities and businesses, states Sacci.
"Since October 2021, when trade entered positive territory with an index greater than 50, trade conditions have improved, with the index closing January at 54.
"However, trade expectations already shifted to the positive side in September 2021 as the six-month expectations index has been hovering around 60 since then," the chamber says.
Since October 2021, all elements of trade conditions have become more stable and have remained close to positive territory. The seasonally adjusted Trade Activity Index (TAI) was 51 in December and 54 in January.
"Expectations remained strongly positive, with 63% of respondents anticipating improved trade conditions in the next six months."
Sales volumes and new orders were at or above the 50-index point mark, indicating greater certainty, while expectations for these elements were well above the 60 mark.
Further, with the index at 55, respondents were well-stocked and expected supplies were stable. Positive expectations for all other trade components also remained well above the 50-index point level.
"Inflationary pressures on the cost and demand sides have eased slightly, but respondents still see price pressure on the high side. Almost 80% of respondents anticipate rising sales and input costs. Higher interest rates may be required as a result of these inflationary pressures," Sacci says.
Meanwhile, load-shedding; water supply disruptions caused by dysfunctional local governments; protests; logistical issues; and transport strikes were among the most pressing external factors impeding trade conditions.
Since the July 2021 unrest and looting and with many clients from the informal market, consumer confidence levels have remained uncertain and depressed. Municipal infrastructure failure has put additional strain on business profit margins and viability. The general complaint continues to be a lack of law and order, the chamber points out.
Additionally, jobs in the trade environment have remained tight and negative, despite the fact that more employment is expected in the next six months as economic and trade conditions normalise. The end of the State of Disaster will ensure even more favourable trade conditions.
The chamber cautioned that external adverse events had a damaging effect on certain businesses and a number of regular respondents to the survey went out of business. The survey results should be interpreted with the necessary caution.