The survey suggested that although some structural economic impediments may be resolved, the poor economic performance at present was preventing trade from reaching its more optimal potential. Picture: Leon Lestrade/Independent Newspapers
Employers in the trade sector in South Africa have expressed intent to employ more people in the next six months after employment in the trade sector was relatively stable in December, despite challenging trade conditions and tight profit margins.
According to the South African Chamber of Commerce and Industry’s (Sacci) December 2024 Trade Conditions Survey, trade expectations outpaced trade activity last month, with respondents employing staff in November (45%) and December (41%).
Sacci said that the trade outlook remained well into positive territory, but present trade activity was still in negative territory.
The survey suggested that although some structural economic impediments may be resolved, the poor economic performance at present was preventing trade from reaching its more optimal potential.
However, 40% of the respondents indicated that present trade conditions were nonetheless better than in December 2023.
Trade conditions slowed down since August 2024 and deteriorated even further, with only 35% of respondents experiencing positive conditions in December 2024.
“However, the outlook for trade in the next six months improved notably, with 65% of respondents in December compared to some 54% of respondents in October 2024 being positive,” Sacci said.
“The sales volumes index of 37 in December 2024 shows that the majority of respondents find trade conditions demanding.”
Increased new orders dipped to 28% of respondents. The difference of 26 index points between present supply deliveries and expected deliveries reflects the logistical problems currently experienced, mainly with rail and sea transport. Lower stock levels confirm the existing tight trade conditions. The six-month sales outlook is nevertheless at a high level, with 72% of participants anticipating better sales compared to 58% in October 2024.
Input costs eased somewhat as the index shed 9 index points between October 2024 and December 2024, while sales prices rose by a modest 2 index points between November and December 2024.
“It is expected that both input costs and sales prices will accelerate in the next six months,” Sacci said.
“As inflationary expectations may rise, it could deter an easier monetary stance and cause the SA Reserve Bank to continue a cautious approach. However, with lower consumer inflation (3%) and producer prices declining (0.1%) in November, a bolder lowering of interest rates may be appropriate.”
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