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Forty two percent of businesses taking part in SACCI’s Trade Conditions Survey in November and December 2022 were positive about prevailing trade conditions. However, if seasonal factors are taken into account, 47% were positive in November while 53% were in positive territory in December 2022. 53% of the respondents also experienced that trade conditions were better in December 2022 than in December 2021. 

Merchandise export trade, new vehicle sales and trade with the neighbouring BLNE countries were all positive. Retail trade however lately experienced a declining trend while the construction industry and the property market experienced lower activity.    

In the December survey 63% of the respondents expected that trade expectations will improve over the next six months. This is the best level for the Trade Expectations Index since February 2017. Expectations nevertheless remained volatile as international events as well as sluggish economic performance tended to feed uncertainty amongst households and investors.  All components of trade activity remained unpredictable in 2022 except for higher input and sales prices that translated into inflationary pressures. However, all components of trade activity excluding input and sales prices, are expected to improve over the next six months. 

High inflation coupled to a tougher stance on monetary policy, left households with less discretionary spending which was exacerbated by high unemployment and salary and wage increases in the private sector being below the inflation rate. Businesses were also finding it harder to remain viable given cost pressures.  Operating costs are expected to rise with 87% of the respondents foreseeing rising input prices/tariffs resulting in 78% of respondents seeing sales prices increasing over the next six months. Fuel prices, especially that of the wholesale price of diesel, that had declined to R23.90 per litre in December, still had increased by 33% y/y. Looming electricity tariff increases and the cost of alternative energy sources due to persistent loadshedding, may again enflame the inflationary processes going forward.

Given the present subdued economic performance and volatile trade conditions, the employment sub-index remained in negative territory at 41 in December 2022. Despite expected better trade conditions in the next six months, prospects for hiring more staff remained dim as only 44% of the respondents in December expected to employ more people over the next six months.  More online transactions may contribute to structural changes of employment in the trade environment.

Issued by SACCI