SA trade conditions remain under pressure – index

Trade conditions in South Africa remained under pressure in June 2019, according to the South African Chamber of Commerce and Industry (Sacci).

Sacci released its Trade Activity Index (TAI) and Trade Expectations Index (TEI) on Wednesday.

All components of present trade activity came under slightly more pressure in June 2019, compared to May 2019. However, input and sales prices eased in June 2019.

The TAI dipped by 3 index points to 38 in June 2019, while the Trade Expectations Index (TEI) remained on the improved level of 48 recorded in May 2019. For Sacci this means respondents to the survey upheld the improved expectations of May 2019.

The seasonally adjusted TAI was unchanged in June 2019 at 38 index points but was marginally higher than the 37 in June 2018.

According to Sacci, all components of trade are expected to improve over the next six months, except for sales volumes that will remain subdued – but still in positive territory at 51. Input and sales prices are expected to decrease further.  

Some respondents indicated that they are considering closing down their businesses due to the difficult economic conditions. Reasons sighted include poor municipal service delivery, a strain on discretionary household spending and increases in electricity, fuel, water and other costs.

Other sectors sighted difficulty in recruiting appropriately trained staff. The employment sub index contracted somewhat in June 2019 to 42 index points from 46 in May 2019, while expected employment conditions in the sector improved as the index increased from 41 to 45.