SACCI Trade Conditions Survey – November 2020

SACCI Media Release                                                             

November 2020 Trade Conditions Survey

Economic Reality Dictates Trade Conditions 

Caution on Survey results:

The lockdown process had an adverse effect on business with a number of respondents going out of business. The results should therefore be interpreted with the necessary circumspection.

The improvement in trade conditions in October 2020 after easier lockdown restrictions, the positive sentiment gave way in November 2020 to the reality of the prevailing business climate and tough economic conditions. After progressing to 51 in October, the Trade Activity Index (TAI) declined to 47 in November 2020 – back in negative territory. 67% of the respondents also indicated that trade conditions in November 2020 were worse than in November 2019. Initial feedback on Black Friday also suggests that businesses experienced less activity than anticipated.

Greater realism and disappointment with Black Friday, made respondents less positive on the outlook for trade conditions in the next six months. The Trade Expectations Index (TEI) dipped to 43 in November 2020 from an upbeat level of 54 in October 2020 and 56 in September 2020.

Trade components like sales volumes, new orders and supply deliveries, dipped notably. The sales sub-index dropped by 10 index points to 57 in November 2020 while the new orders index declined by 7 index points to 50. Although probably disappointed with Black Friday, sales volumes were nonetheless still well into positive territory. The backlog on orders and inventories were less affected and better than even the improved September 2020 levels.

Expectations on all trade components like sales volumes (down to 39 from 57 index points), new orders, supplies, backlog on orders, and inventories, declined markedly between October and November 2020.  Whereas 54% of respondents were positive on trade conditions for the next six months in October 2020, only 43% felt positive in November 2020.  

The tight trade conditions filtered through to prices where present and expected sales and input prices remained virtually unchanged from the October to the November surveys.  In general, respondents saw the continuing Covid-19 lockdown process, the general economic situation, input costs – especially staffing, and adverse conditions in the hospitality industry, as main causes contributing to dampened trade expectations. However, certain trade categories such as trading technology and home office related equipment and hardware, experienced improving conditions. 

Employment conditions in the trade sector weakened in November after it improved in October 2020. The employment sub-index declined from 48 to 43 in November 2020 with employment expectations also dipping from 42 in October 2020 to 38. In the near future it does not seem evident that the trade sector will contribute to alleviate the present high unemployment challenge.  

Released by the South African Chamber of Commerce and Industry at their offices in Illovo, Johannesburg.

For more information and infographic, see below or 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 5566

Infographic