SACCI expects slow pick up in business activity with eased lockdown
JOHANNESBURG – South African companies remain negative about trade conditions for the rest of this year after business activity was decimated by the strict Covid-19 lockdown in the second quarter.
The SA Chamber of Commerce and Industry (Sacci) said on Wednesday that most of the respondents to its Trade Activity Index (TAI) survey were pessimistic about the future.
Sacci said the lockdown had deepened the recessionary economic conditions and further distorted trade conditions.
“Expected trade conditions consequently also deteriorated strongly in April, with 70 percent of respondents having a negative outlook,” Sacci said.
“Respondents remained sceptical in July, with 62 percent maintaining a negative view about trade conditions for the rest of 2020.”
A reading above or below 50 index points implies a positive or a negative change, while 50 points reflects a “no change”.
The seasonally adjusted TAI gradually increased to 37 points in July after declining 11 index points to 26 points in April during the hard lockdown. Sacci said trade expectations for the next six months recovered somewhat, but implied a slow recovery if the lockdown regulations were reduced.
It said sales volumes and new orders improved in July from highly depressed levels in April, and were expected to recover but remain sluggish towards year-end.
Sacci said the interference in consumer choice for certain goods and services had multiplying effects beyond the trade environment of such goods and services.
Yesterday, the Bureau for Economic Research said the return to pre-Covid-19 growth levels was likely to lag the experience of South Africa’s major trading partners.