Business sentiment improves, Trade Activity Index shows
JOHANNESBURG - TRADE conditions in South Africa have turned more positive following a meaningful improvement in March after the lockdown in December dampened trade.
Sacci said that the sentiment had improved significantly from a year ago, with the Trade Expectations Index (TEI) increasing by not less than 13 index points a year ago.
The pro-business lobby group said the lockdown process had an adverse effect on business and a number of regular respondents went out of business.
It said the restrictions gave way to a more optimistic outlook in February and March.
Sacci chief executive Alan Mukoki said the improvement of trade conditions was in all the elements of trade, particularly sales volumes and new orders.
The six-month expectations on components such as sales, orders, supplies and inventories all experience meaningful improvements on the end of 2020 and January trade conditions.
Mukoki said the supplier deliveries index also improved significantly as a more business friendly approach towards the lockdown also benefited the outlook on trade conditions.
“Trade expectations for the next six months moved into positive territory with the TEI improving from 40 points in January to 54 points in March,” he said.
“It should be noted that the more positive outlook on trade stems from the difficult situation trade had to deal with towards the end of 2020.”
Sacci said the better trade conditions were accompanied by higher sales and input prices.
“Although sales price rises are expected to ease over the next six months, input costs are anticipated to keep on rising given announced fuel and electricity price hikes,” it said.
The survey also showed that employment conditions in trade improved to pre-December lockdown numbers.
This supports data from Statistics South Africa, which showed that unemployment eased slightly in the fourth quarter of 2020 as 76 000 jobs were created between September and December.
Sacci said 47 percent of respondents indicated higher employment in March compared to 38 percent in January.