Return to level 3 deals trade conditions a blow
JOHANNESBURG - TRADE conditions in South Africa suffered a setback in January due to the return to a more stringent lockdown implemented to curb the spread of the second wave of Covid-19 infections.
The SA Chamber of Commerce and Industry (Sacci) yesterday said its Trade Activity Index declined to 34 points after falling to 39 points in December, from 47 points in November.
The last time the index was above 50 points – which implies a positive reading – was in October last year, when it recorded 51 points after the lockdown restrictions were eased to level 1.
Sacci said the restrictions imposed during the holiday period and for the first two weeks of January had an adverse effect on business.
It said the deterioration in conditions was evident in almost all facets of trade except for supplier deliveries.
It said 66 percent of respondents said they experienced worse trade conditions in January compared to the same month a year before.
Sacci chief executive Alan Mukoki said respondents also listed external matters, apart from the health aspects of the Covid-19 pandemic, that impacted trade conditions.
“Slow business momentum, uncertainties about the timing and duration of lockdowns, collapsing infrastructure, lack of maintenance and poor service delivery on local government level are of major concern and are adversely affecting business,” Mukoki said. “Some improved bookings by accommodation venues during January and hope on Budget 2021 are some positive notions put forward.”
Sacci said trade expectations held up better. The Trade Expectations Index declined by 11 points in November to 43 points, remained at 43 points in December, and declined to 38 points in January.
“Overall trade expectations declined in November 2020, continued to experience pressure in December, and then slipped further in January 2021,” Mukoki said.
Sacci said expectations of lower supplies and declining inventories were more evident in the January survey.
However, Sacci said the deteriorating trade conditions did not have a notable effect on prices, as present and expected sales prices did not change materially in December and January.
In terms of employment conditions, respondents said they expected to increase jobs over the next six months, with 40 percent positive about employment in January, compared with 38 percent in November.