SACCI Press ReleaseAdverse Trade Conditions
Trade Conditions weakened in April 2018 with the Trade Activity Index (TAI) of SACCI’s Trade Conditions Survey for April 2018 measuring 39 after recording 43 in March 2018. The six month Trade Expectations Index (TAI), however, increased slightly to 54 in April 2018 after recording 52 in March 2018. The prevailing tight trade conditions are reflected by lower sales volumes, weak new orders and declining supplier deliveries. The current trade conditions are more restrained than in April 2017 with the TAI 6 index points lower in April 2018 than a year ago. Trade expectations are better than a year ago with the TEI at 54 – two index points above the April 2017 level.
Respondents to the Survey point to the fuel price increase that affected turnover – putting profit margins under pressure. Bigger clients are lengthening the credit cycle thus influencing cash flow. Many businesses have become dependent on exports owing to the regulatory environment in South Africa but with the stronger rand reducing rand income. The requirements to adhere to ownership prescriptions in SA are having negative effects on manufacturing businesses. The increase of VAT to 15%, the higher fuel levy, strikes, and looting and property damage at certain locations, had a negative effect on trade activity.
Sales volumes slipped in April 2018 with the sub-index 11 points lower at 35 from 46 in March 2018, but with the new orders index only slightly down by one point to 34. Expected sales volumes and expected new orders were both higher – sales from 58 to 61 and new orders from 51 to 54 respectively between March and April 2018. Inventories anticipated to decline to 48 from the 53 over the next six months.
The sales price index was up by 2 index points to 61 month-on-month while the input price index remained unchanged at 72. The increase was caused by the introduction of taxes and levies in the Budget and a rise in notably the crude oil price and weaker rand. Priceexpectations however mainly kept to the same levels as last month.
The employment sub-index improved by one point to 43 in April 2018 while the 6 months employment outlook index increased by 6 index points to 52 in April 2018. The employment sub-indices however remain erratic.
Released by the South African Chamber of Commerce and Industry at the SACCI offices in Rosebank, Johannesburg
For more information and infographic, see the SACCI website – www.sacci.org.za or contact:
Alan Mukoki SACCI CEO Cell: 082 551 1159
Richard Downing Economist for SACCI Cell: 082 822 5566Infographic: