Sacci confirms tough trade conditions in January
The profits and viability of businesses are under pressure as they battle to pass rising input costs onto customers
Trade was tough in January as well-over half of businesses experienced negative conditions — and do not expect things to improve in the coming six months.
A lack of business confidence, lower real disposable household income, job losses, and increases in administered prices, were a few of the factors weighing on trade conditions, according to the latest SA Chamber of Commerce and Industry (Sacci) trade conditions survey, released on Thursday.
The survey — which includes both the Sacci trade activity index (TAI), as well as the trade expectations index (TEI) — revealed that 57% of respondents had experienced negative trading activity during January, as the activity index fell to 43 points.
The expectations index — which assesses participants’ expectations of sales volumes, new orders, supplier deliveries, inventory levels and employment levels in the coming six months — was unchanged at 46.
Both indices range between 0 and 100, with 50 as their neutral mark; anything lower than that is deemed to be a negative reading.
The tight trade conditions continued to suppress sales prices for businesses with half the participants reporting unchanged selling prices reflecting “rigid and low demand”, according to Sacci.
At the same time, however, 65% of respondents have experienced rising input costs, “putting profits and the viability of business under pressure”, Sacci said in a statement.
“Lack of service delivery does not justify the tax and tariff burden of a few municipalities. The erratic energy supply due to electricity blackouts and cable theft hampers trade, with the costs of fuel and alternative energy supplies playing havoc with input costs.”