Forty-two percent of businesses surveyed by SACCI in October 2022 experienced subdued trade conditions although 58% of the respondents were positive about trade conditions for the coming six months.
“High levels of load shedding in notably September and an unstable price environment driven by higher fuel prices impacted inflation,” says Alan Mukoki, South African Chamber of Commerce and Industry (SACCI) CEO.
“Merchandise import and export trade volumes and tourist growth softened the impact on the economy.
“The 59% of the respondents expressed positive trade expectations in October from low levels of 41% in February 2022 and 47% in May 2022. Conditions in general were difficult to predict, in a turbulent market.
“All components of trade activity remained unpredictable over the past ten months with the notable exception of input and sales prices that were maintaining increased levels. Present and expected supplier deliveries remain at a stable level and less volatile.”
Mukoki adds that inflationary pressures were intensifying over the ten months to October 2022 with a concomitant monetary policy stance that became stricter.
“This notably left households in a difficult position as unemployment subdued salary and wage increases (being below the inflation rate) and the effect of business finding it hard to remain viable,” he explains.
“Operating costs were still rising as 83% of the respondents experienced rising input prices/tariffs and 86% still see input prices increasing over the next six months.
“Fuel prices especially that of diesel, increased to its highest level ever of R27 at the pump – up by 48% y/y. Looming electricity tariff increases could further fuel the inflationary process.
“Given the present restrained trade conditions, the employment sub-index was down by seven index points to 42 in October from 49 in August 2022. Notwithstanding tight trade conditions, 45% of the respondents in October still expected to employ more staff over the next six months.”