JOHANNESBURG – Trade conditions were expected to improve for the next six months after marginally improving in August, although conditions remained tough, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.
Sacci’s Trade Activity Index increased by two index points from 40 to 42 points and the Trade Expectations Index improved by four index points to 46 points in August.
This comes on the back of the growth domestic product (GDP) rebound as the economy recorded a 3.1 percent growth in the second quarter, though it is still under pressure. Sacci said respondents expect all trade activity components in the next six months to improve, except for sales prices.
The chamber said higher sales and input prices in August were a result of the tough trade conditions, which exerted more pressure on businesses to remain profitable.
The slightly lower input prices continue to put pressure on profitability.
As a result, reduced trade activity caused the backlog on orders to decline notably, although stock levels rose as supplier deliveries increased in August.
Apart from trade activity components, Sacci said respondents mentioned that clients either were not honouring payments or pay late.
“The weak rand negatively influenced some high import propensity sectors while benefiting some exporters,” it said. “The notable higher tariffs on water and electricity continue to negatively impact trade costs.”