Trade Conditions Held Up
The SACCI Trade Conditions Survey for March and April 2025 shows some resilience despite subdued overall economic circumstances. The improved trade conditions in the first two months of 2025 was extended into March but retreated somewhat in April. Forty-nine percent of the respondents reported positive trade activities in April after 55% had positive experiences in March 2025. Forty-nine present also indicated that trade conditions were below the April 2024 levels. Seasonally adjusted conditions for April 2025 suggest a dip of about 5% from March. However, 69% of the participants expect trade conditions to improve over the next six months. Trading day regression due to fewer selling days and the alignment of public holidays did not affect overall trade conditions in April 2025.
It would appear that the actions taken to enhance local economic performance are perceived as positive despite a global uncertain economic environment. The VAT saga during March and April did cause some discomfort and additional costs to trade. Inflation that declined further in March 2025 provided notable easing, as with, for instance lower fuel expenses. The trade outlook for the next six months improved with expectations for trade volumes, orders, supplies, and inventories looking favourable. Whereas 75% of the respondents were positive in December 2024, 70% had a positive six-month outlook in April 2025. The moderation of expectations is
in accordance with uncertainty and a subdued performance of the local economy in general. The expected slower rise in input costs and lower inflationary expectations while maintaining higher sales volumes and new orders may depend on the extent to which the economy performs under the present restricted and uncertain global conditions. Under these uncertain overall circumstances, the most
viable options for balancing a budget are to cut spending given that personal income and corporate tax impact impacts on trade in South Africa are already high compared to international standards. Under tight trade conditions it is easy to draw up a budget that provides for expenses but it is much more challenging to budget for increased income. Recent data on trade activities like new vehicles sales (+11% y/y), retail sales (+4% y/y), and merchandise imports volumes (+1% y/y) point towards positive trade developments. New vehicle sales as a leading indicator continued the upward momentum of the first quarter into the second quarter 2025.
However, merchandise export volumes (-1.8% y/y), inward overseas tourists (-1% y/y), and the real value of building plans passed (-4.8% y/y) all declined imply trade conditions are exposed to discrepancy. With a possible global trade war in the offing, trade conditions may become exceedingly perplexing. Given the openness of the South African economy and the inward linkages to the local
economy, global trade will be critical to trade conditions. The trade conditions in March and April 2025 reflect some stability in employment while respondents anticipate hiring more staff in the next six months given overall improved trade expectations.
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