Trade activity recovering at moderate pace but remains below neutral level
After being in negative territory in July and August, trade expectations for the next six months moved into positive territory, the organisation adds.
“Sales volumes improved, but remained depressed with new orders declining in September. Expectations for sales volumes and new orders were well into positive terrain, with the indices around 60.
“Inventories and supplier deliveries remained relatively stable in September and are expected to continue to do so in the next six months,” Sacci points out.
Further, owing to turbulence in the trade environment, sales prices were more erratic and recently declined; however, sales prices were expected to increase at an accelerated pace over the next six months.
The majority of respondents, 76%, are expecting input costs to increase notably in the next six months, with municipal tariffs and rising fuel prices cited as major contributors to these increases.
“Uncertainty surrounding the Covid-19 lockdowns and the effect on the economy was a contributing factor towards instability in the trade environment, particularly to entertaining, catering and accommodation. Respondents regard the slow pace of vaccination as detrimental to normalising trade activity.
“The application of law and order, and municipal service delivery, are causes of concern. The volatility of the rand exchange rate has been reported as complicating cross border trade. Job losses were also indicated as affecting consumer demand at retail level,” Sacci says.
Employment in the trade environment remained in negative territory and it is not expected to improve over the next six months.
In a cautionary note on the survey, Sacci says external adverse events had a damaging effect on certain businesses and a number of regular respondents to its surveys went out of business.
Courtesy of Engineering News – full article here