- Trade expectations for the next six months have moved into positive territory.
- The Trade Conditions Survey reflected a lift in trade activity as well as the outlook.
- A more "business or economy friendly" lockdown approach helped to lift expectations, according to the South African Chamber of Commerce and Industry.
Trade conditions are expected to improve in the coming months, following a stringent lockdown over December 2020, according to the South African Chamber of Commerce and Industry (Sacci).
Sacci on Wednesday released the Trade Conditions Survey for March 2021. Sacci however, noted that due to the lockdown and the adverse effects on business, several of the regular respondents are now out of business - so the results of the March 2021 survey must consider these changes in the business environment.
According to the report, the Trade Activity Index - a measure of sales volumes, new orders, supplier deliveries, inventory levels and employment - lifted from 40 points in February to 49 points in March. The index ranges from 0 to 100. A move above 50 indicates a positive reading, while a move below 50 reflects a negative reading.
"The improvement of trade conditions was in all the elements of trade – particularly sales volumes and new orders. Supplier deliveries also improved significantly," the report read.
The Trade Expectations Index climbed from a low of 40 points in January 2021 to 54 points in March.
"It should be noted that the more positive outlook on trade stems from the difficult situation trade had to deal with towards the end of 2020," the report read.
Expectations for sales, orders, supplies and inventories also improved.
"A more business/economy friendly approach towards the lockdown process also benefitted the outlook on trade conditions," the report read.
There has also been a boost to sales and input prices. The sales price rises are expected to ease over the next six months. Input costs are expected to rise given fuel and electricity price hikes, Sacci indicated. Similarly, the IHS Markit Purchasing Managers' Index for March noted that supply chain issues were placing upward pressures on input prices.
Sacci noted that employment conditions in the trade sector improved to levels before the December lockdown.
"Forty seven per cent respondents indicated higher employment in March compared to 38% in January 2021 while 50% of the respondents expect to employ more people over the next six months," the report read.