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8 reasons why SA trade is still much lower than a year ago

Apr 18 2019 07:32

The level of trade in SA is still in negative territory and much lower than in March 2018, according to the latest Trade Activity Index (TAI) released by the SA Chamber of Commerce and Industry (Sacci).

Respondents listed the following challenges as the main obstacles to trade growth:

  • Competition;
  • Low economic growth;
  • Service delivery issues;
  • Labour and other protests;
  • Safety and security concerns;
  • Poor service delivery;
  • Less disposable income of consumers;
  • Escalating energy and transport costs.   

"Current trade conditions, as reflected by the TAI, recovered to a seasonally adjusted 37 in March 2019 from 30 in January 2019, and 34 in February 2019," Sacci said in a statement.

According to the index survey, the tough trade conditions will ease slightly in the next six months as reflected in the seasonally adjusted Trade Expectations Index (TEI). The TEI increased by 4 index points to 43, but is still 10 index points below last year's level.
   
Respondents indicated that the possibility of a stricter trade control and regulatory environment in the short to medium term will add pressure to the already tough trade environment.

Some respondents have responded to these domestic challenges by refocusing their businesses to be more export market focused, the survey found.

The survey also indicates that sales volumes improved marginally from 35 to 39, although the negative trend remains. Sales expectations for the next six months indicate a significant improvement to a positive 50.

Supplier deliveries improved significantly in March 2019 from a low 28 to 41 level, despite only 36% of respondents being positive on upcoming supply deliveries.
 
Pressure on prices continues as both the sales and input prices sub-indexes showed increases. Although sales price increases are anticipated to slow down slightly, 78% of respondents anticipate input costs to continue increasing.

The rand exchange rate, fuel cost and electricity tariff increases, could materially impact price movements, respondents indicated.
    
The employment sub index number has improved from 24 in January to 35 in February, and to 39 in March 2019, although only 33% of the respondents in March expected to employ more staff.

sacci  |  trade  |  sa economy
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