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Strained Trade Conditions for SA

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South African Trade conditions strained. Supplied South African Trade conditions strained.
60% of the respondents being in negative territory compared to 57% in January
Staff reporter
March 13, 2020
Gauteng, South Africa: In line with the recessionary conditions since the 3rd quarter of 2019, the South African Chamber of Commerce and Industry Trade Conditions Survey in February 2020 confirmed flattening trade activity. Real activity in the wholesale, retail trade, hotels and restaurants experienced zero growth in 2019 and even declined by 0.3% year-on-year in the 4th quarter 2019.

"Trade conditions deteriorated further in February 2020 with 60% of the respondents being in negative territory compared to 57% in January. However, this is an improvement on February 2019 when 65% of the respondents reported adverse trade conditions. Only 45% of respondents see conditions improving over the next six months," said the South African Chamber of Commerce and Industry (SACCI) in a statement. 

The Trade Activity Index averaged 42 over the past six months. Trade Conditions appear to be caught up in negative territory except for if the economy starts performing better. General six-month expectations in the trade sector also weakened from their January levels but sales expectations were marginally in positive territory – i.e. above 50.

"Although February sales volumes remained in negative territory with the index stable around 40, the other trade activity components deteriorated. The flat trade conditions were also reflected in sales price increases being low and declining. It further appears that the increase in costs have eased somewhat. However, it is expected that sales and input price pressures will remain high in the next six months due to weak aggregate demand emanating from the effects of Covid-19 and recessionary conditions," read the statement. 

Other matters that were mentioned by respondents permeating general business conditions include major issues and delays at ports and that are getting worse; compliance costs for businesses due to rigid labour laws; pressure and sustainability of medical services; the Corona virus that already has secondary effects on physical global supply and sales; and erratic electricity supply that continues to disrupt trade momentum.

Employment opportunities remained scarce with the sub-index unchanged at 44 in February while job opportunities over the medium term remaining limited with the sub-index on expected opportunities increasing to 41 from 38.
Last modified onFriday, 13 March 2020 12:37