SA trade activity index at its lowest since 2000 - SACCI

The January 2019 trade conditions survey by the SA Chamber of Commerce and Industry (SACCI) found 70% of respondents to be negative about trade conditions in SA.

The Trade Activity Index (TAI), at 30 in January 2019, was at its lowest level since inception of the survey in 2000. The previous lowest level for the TAI was 32 in April 2009 - in other words after the financial crisis of 2007/08.

The seasonally adjusted Trade Activity Index (TAI) slipped by 17 index points between January 2019 and December 2018.

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According to Sacci, it appears that a notable change occurred in the seasonal patterns of trade conditions due to the Black Friday phenomenon in November. The TAI was nonetheless 14 points down on January 2018.

Trade expectations for the next six months remained negative, although not as depressed as present conditions, according to Sacci. The seasonally adjusted Trade Expectations Index (TEI) is down by four index points on the December 2018 level of 45.

The TEI was nevertheless 18 points below the January 2018 level of 60 – according to Sacci, partly due to high expectations in January 2018 after new leadership was elected by the ANC.

2019 'more promising'

"Although 2019 is more promising, it still points to the reality of continuing political uncertainty, high unemployment, load shedding, land reform, a subdued local and world economy, compliance cost of the regulatory environment, strikes, and wage demands that exceed inflation and stifle the trade environment," Sacci said in a statement.

The sales sub-index declined by eight index points to 35 in January 2019, while the new orders index dropped by one index point to 32. The sales outlook also deteriorated as the index declined by four index points to 46.

• READ: SACCI business confidence dips in December

Expected new orders slipped by three index points.

Weak trade conditions caused the sales price index to drop by 10 index points – suggesting defensive reaction to improve sales volumes while input prices also dropped with the January 2019 index 14 points lower, according to Sacci.

It expects sales and input prices to drop by five and six index points respectively over the next six months, implying muted inflationary pressures in the trade environment.

It said a stronger rand and lower fuel prices could further contribute.

The employment sub-index declined substantially by 15 points to 24 in January 2019 while the six-month employment-outlook also deteriorated moderately although with the index declining by three index points to 38.