January 2021 Trade Conditions Survey
Cautionary Note on Survey:
The lockdown process had an adverse effect on business and a number of regular respondents went out of business. The results should therefore be interpreted with the necessary circumspection.
The second wave of Covid-19 infections and the return to a more stringent lockdown in December 2020 caused a setback in trade conditions during the holiday period in December 2020 and in January 2021. The Trade Activity Index (TAI) declined to 39 in December and further to 34 in January 2021 from 47 in November 2020. The deterioration of trade conditions was evident in almost all facets of trade except for supplier deliveries. Sales and new orders declined the most while inventories and employment declined relatively less. 66% of the respondents experienced worse trade conditions in January 2021 than in January 2020.
Trade expectations held up better, but also reflected the pressure after the temporary improvements in September and October 2020. Overall trade expectations declined in November 2020, continued to experience pressure in December, and then slipped further in January 2021. The Trade Expectations Index (TEI) declined by 11 points in November to 43, kept to 43 in December and then declined to 38 in January 2021.
The six-month expectations on components such as sales and orders did not weaken as much as for recent trade conditions. Expectations of lower supplies and declining inventories were more evident in the January 2021 survey.
The deteriorating trade conditions did not have a notable effect on prices. Present as well as expected sales prices did not change materially in December 2020 and January 2021. Sales prices remain under downward pressure while input prices trend upwards. This is also the expected pattern on prices six months hence.
Respondents also listed external matters, apart from the health aspects of the Covid-19 pandemic that impacted trade conditions. Slow business momentum, uncertainties about the timing and duration of lockdowns, collapsing infrastructure, lack of maintenance and poor service delivery on local government level, are of major concern and are adversely affecting business. Some improved bookings by accommodation venues during January and hope on Budget 2021, are some positive notions put forward.
Employment conditions in trade weakened slightly in December 2020 and January 2021. 38% of respondents were positive on employment in January 2021 compared to 43% in November 2020. Respondents expect to increase jobs over the next six months – 40% were positive on employment in January 2021 against 38% in November 2020.
Released by the South African Chamber of Commerce and Industry at their offices in Illovo, Johannesburg. For more information and infographic, see the SACCI website – www.sacci.org.za or contact:
SACCI CEO Cell: 082 551 1159
Economist for SACCI Cell: 082 822 5566