The South African Chamber of Commerce and Industry (Sacci) survey of the trade environment in August shows that trade conditions remain tight and unsteady.
The composite index (TAI) of the survey represents the up-to-date performance of a number of trade elements, while the TEI measures expectations on trade elements in six months’ time.
The present trade milieu remains difficult with 57% of the respondents experiencing negative trade conditions.
Despite negative existing considerations, 56% of respondents are nonetheless still positive about trade conditions six months from now.
Sacci reports except for a slight easing in input costs, all the other trade elements deteriorated between July and August.
Input costs, however, remain high, with 78% of respondents experiencing rising input costs in August. With only 58% of respondents reporting rising sales prices, inflationary pressures might ease further. Sales volumes and employment weakened the most of all the trade elements.
The wholesale and retail trade; hotels and restaurants sector contracted by 1.2% year-on-year in the first half of this year, confirming a constrained trade sector.
Regardless of the current inhibited trade conditions, the positive expectations for the next six months support a positive outlook on trade.
Recently released data show that retail trade volumes remain under pressure, having decreased by 1% year-on-year in the first half of the year, while import volumes grew by 8.3% year-on-year in the first half of the year. Export volumes and new vehicle sales also experienced year-on-year growth rates at 3.7% and 4.5%, respectively.
The number of visiting tourists increased by about 30%, but the number was still 35% below pre-Covid-19 levels of February 2020.
Sacci further finds that electricity and water supply output declined by 6.5% year-on-year in the first half of the year, weighing on trade activity and input costs.
Increasing debt servicing costs owing to higher debt levels and higher interest rates are also adversely affecting longer-term investment decisions and resources.
Sacci concludes the unsteady trade environment affects employment in this sector negatively, thereby contributing to the decline of appointments between July and August.
The expected rise in appointments in the next six months still reflects a positive assessment of labour in the trade environment.