JOHANNESBURG - The SA Chamber of Commerce and Industry (Sacci) said yesterday that trade conditions in South Africa continued to deteriorate in April, with property and rental sector companies experiencing an increasing number of payment defaults as economic activity ground to a halt due to the lockdown.
Sacci said the two sectors also saw an increase in the number of requests for payment and levy holidays during the period. The chamber said even the retail food sector continued to face headwinds in April.
It said the trade environment called on businesses to employ extraordinary efforts to keep afloat as the country entered deeper recessionary economic conditions last month. “Due to the lockdown, certain businesses and food processors have been closing owing to fixed overheads but with a rapid dwindling income,” Sacci said.
“Respondents call for an end to the lockdown as they cannot afford to continue. Respondents accept a calculated, but balanced risk to unlock the economy.” Sacci said trade expectations for the next half-year were expected to deteriorate as expectations for the next six months plummeted by 10 index points. It said sales volumes and new orders plunged deeply in April as 78 and 76 percent of businesses experienced adverse conditions in these important trade elements.
The chamber said expectations for sales and new orders have thus both contracted substantially on a weak demand forecast.
It said the adverse effect on new vehicle sales in April, which plunged 98 percent month-on-month, was an example of the notable impact the lockdown had on “non-essential” trade.
Supplier deliveries and inventories were also foreseen to deteriorate notably over the next six months, after pointing towards the effect on stock and supplies breakdown in April.
Sales and input prices were expected to be under pressure, but to remain above the 50-point index mark.
In a separate report, PricewaterhouseCoopers (PwC) said workplace activity was 66percent lower during level 5 of the lockdown compared to a reference period of January and early February. PwC said the domestic economic outlook had deteriorated further, and now forecasts an economic contraction of up to 13percent this year.