South African trade conditions slump in April due to Covid-19 lockdown
JOHANNESBURG - Trading conditions in South Africa were badly affected during April by a lockdown aimed at limiting Covid-19 transmissions, with an index that tracks activity declining 11 points, a leading business chamber said on Thursday.
The South African Chamber of Commerce and Industry (SACCI) said its latest survey showed sales volumes and new orders plunged during the month, with 78 percent and 76 percent of the respondents respectively experiencing adverse conditions.
SACCI's seasonally adjusted trade activity index declined by 11 points to 26 in April compared with March, while the seasonally adjusted trade expectations index dropped by 10 index points to 31 - well beyond recessionary conditions.
"The adverse effect on new vehicle sales in April is an example of the notable impact the lockdown had on ‘non-essential’ trade," SACCI said.
New vehicle sales plunged 98.4 percent to 574 units in April compared with the same month last year, reflecting the impact of the lockdown imposed from March 27 which brought most business activity to a virtual standstill, the National Association of Automobile Manufacturers of South Africa said last week.
On Thursday, SACCI said respondents in its survey from the property and rental market experienced requests for payment and levy holidays while there was an increasing number of residential rental payment defaulters.
"Due to the lockdown, certain businesses and food processors have been closing owing to fixed overheads but with a rapid dwindling income," it said.
Although employment held up reasonably in March, the chamber said, it decreased notably in April, with the sub-index declining by nine index points to 32. Employment opportunities for the next six months remained bleak, it added.
Earlier, another business group, Sakeliga, said the extended lockdown was "an economic, humanitarian, and social disaster in the making", with 19 percent of businesses it had recently polled expecting to go bankrupt within the next month and 32 percent within the next three months.
It said President Cyril Ramaphosa's government had provided no independently verifiable criteria to businesses and the public regarding when and how the lockdown should be lifted.