Trade conditions remained tight in January 2020 with 57% of the respondents experiencing negative conditions while 54% of the respondents expect conditions to remain depressed in the next six months.
This is according to the South African Chamber of Commerce and Industry (SACCI).
“The seasonally adjusted Trade Activity Index (TAI) recorded 43 – down one index point, while the Trade Expectations Index (TEI) remained on 46, as was the case in the previous two months,” said SACCI CEO, Alan Mukoki.
“The average for the TAI for 2019 was 39 implying that 61% of the respondents experienced tough trade conditions in 2019.
“The different elements of trade were mixed in January 2020 with sales and new orders well into negative territory, i.e. below the 50 index mark at 40 and 41 respectively.”
Mukoki said that the tight trade conditions continued to suppress sales prices with half the respondents reporting unchanged selling prices reflecting rigid and low demand.
“Contrary to sticky sales prices, 65% of the respondents continued to experience rising input costs – putting profits and the viability of business under pressure.
“External conditions that continued to affect the trade environment included lack of general business confidence; decreased real disposable household income; cost of living that exceeds general inflation; job losses; weakening rand, and real increase in administered prices,” he described.
“Lack of service delivery does not justify the tax and tariff burden of some municipalities.
“The erratic energy supply due to electricity blackouts and cable theft hampers trade with the costs of fuel and alternative energy supplies playing havoc with input costs.”
Mukoki said that though the lowering of the repo rate by the SARB in January was a positive move which improved trading conditions – albeit at a depressed level, tight trade conditions remained.
“Employment opportunities remained scarce with the sub-index virtually unchanged at 44 compared to 45 in December 2019, while employment prospects for the next six months remained subdued with the sub-index on employment expectations remaining on 38.”