Hesitant local trade conditions   

Trade conditions reached an all-time low in April and May 2020 (Trade Activity Index - TAI at 29) when the lockdown due to Covid-19 was at its most stringent. During the December 2020/January 2021 lockdown, trade conditions suffered a second severe Covid-19 lockdown that again negatively impacted trade (TAI 34). Since then, trade conditions improved (TAI 49 in April 2021), but was again down in May 2021 with the TAI at 36. The possibility of a stronger lockdown caused by the advent of a 3rd wave of Covid-19 weighed on trade conditions. Trade expectations, however, remain in positive territory with 56% of respondents still positive about trade conditions six months hence.

Business environment uncertainties weighed heavily on almost all elements of trade, namely lower sales volumes and less new orders, disrupted supplier deliveries, and higher sales prices. Less backlogs on orders, improved inventory levels and a smaller rise but still high input costs were some positive developments that respondents reported lately.

Trade expectations for the next six months nevertheless maintained the positive direction since March with 56% of the respondents optimistic about expected conditions. The prospects for employment and anticipated higher input costs were the only elements that are seen to weigh negatively on trade conditions in the next six months. The greater awareness by government of the business and economic effect of the lockdown process appears to have a less inhibiting effect on trade conditions.   

The expected improved trade conditions could be met by relative stable sales prices although the inflationary process might be fuelled from a cost push side with higher fuel prices and increased water and electricity tariffs. 

Respondents listed a number of general conditions that are curtailing trade - specifically logistic transport problems at harbours, and criminal elements targeting deliveries and supplies on some main routes. The strong rand made local manufactured goods less competitive to imported goods, but merchandise export trade is experiencing exceptionally buoyant conditions at present.

Issued by SACCI