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Cautious trade conditions in SA remain - index

15 May 2019, 22:13 GMT+10

Political activity and anxiety ahead of the national election on May 8, coupled with the effects of public holidays, slightly depressed trade conditions in April, according to the latest Trade Activity Index (TAI) released by the SA Chamber of Commerce and Industry on Wednesday.

In April the TAI was 37, marginally down from 39 in March 2019, but up from 35 in April 2018.

The seasonally adjusted Trade Expectations Index (TEI) for April 2019 was 38, down from 42 in March and down 15 index points from 54 in April last year. Sacci says the TEI indicated that cautious trade conditions remain.

"The widely held view [is] that the then upcoming elections [were] responsible for the absence of such adverse events like load shedding when problems at Eskom still persist," said Sacci. "This creates a cautious approach to immediate and short-term business decision making, as businesses hedge against a possible risk that, now that the elections are over, adverse events would return."

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In the view of Sacci, this caution is responsible for the decrease in almost all the activity sub-indices, and is in line with expectations for a month with many public holidays.

"Pressure on prices remained as indicated by lower sales and input price sub-indices. The decline in sales and input prices is expected to continue over the next six months notwithstanding 72% of respondents still anticipating input costs to rise," said the chamber.

About 34% of respondents were positive on future supply deliveries.

The employment sub index dropped from 39 in March 2019 to 36 in April 2019. About 35% of respondents indicated that they intend to employ more staff in the next six months.

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