Trade conditions further constrained – SACCI

Trade conditions further constrained - SACCI

After trade conditions reached an all-time low in April and May 2020 due to strict lockdown measures to curb Covid-19 infections, trade conditions were more recently hampered by a third wave of infections and a reversion to stricter lockdown conditions, the SACCI says in its latest Business Confidence report.

“This caused trade to become more constrained in June and July 2021. Looting and destruction of property in July caused a further setback in trade activity,” describes Alan Mukoki, SACCI CEO.

“The Trade Conditions Index (TAI) declined from 48 in April 2021, to 39 in May 2021, 34 in June, and further to 33 in July 2021.

“74% of the respondents saw sales volumes declining in July 2021 with only 33% experiencing an increase in new orders. All the other survey indicators on trade activity pointed south.

“Sales prices eased slightly, while input costs increase also levelled out, but remain relatively high. Inventories as well as supply deliveries were down.”

Mukoki adds that expectations for the next six months were restrained with more than 50% of respondents being negative about medium-term trade activity.

“However, 46% of the respondents still perceive present trade conditions in a better place than in July last year,” he notes.

“Trade expectations for the next six months took a real dip as it moved into negative territory, i.e. the Trade Expectations Index (TEI) dipped below 50 after improving significantly since March 2021 and reaching well above 50.

“The prospects for sales and new orders decreased notably in July. Supply deliveries and inventories are also expected to be adversely affected. Input and sales price expectations remain, more or less, at present levels.”

He says, according to respondents, the Covid lockdown and the looting and disruption of supply logistics in certain areas during July, could have longer-term consequences for trade operations.

“The stronger rand was also seen as detrimental to some local producers competing with imports. It is further feared that job losses will negatively affect demand. Retailers complain about not receiving relief from local authorities by way of lower tariffs without any sympathy given to the extraneous disruptions caused to their businesses,” Mukoki notes.

“Employment in the trade environment was not seriously impacted although employment expected to remain tight in the medium-term.”

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