Power instability debilitating factor for SA trade conditions - index

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Over the next six months trade in South Africa is expected to decline further into negative territory, according to the seasonally adjusted Trade Expectations Index (TEI) released by the SA Chamber of Commerce and Industry on Thursday.

Respondents surveyed in the latest edition of the index mentioned power instability as a debilitating factor affecting South Africa's business climate. They expect electricity instability to continue for some time, as witnessed by the load shedding over the past fortnight.

The survey shows that market conditions in the trade environment remain difficult, with continued pressure on sales prices while input costs remain high. Respondents indicated that 2019 has been a particularly difficult year for local and international trade.

Sporadic strikes at state-owned enterprises and other "disruptions" also impacted the trade environment.

The TEI indicated that all the components of SA trade activity are expected to decline over the next six months, except for sales prices and input costs that are expected to ease further. The seasonally adjusted TEI declined from 49 in October to 46 in November this year.

While the TEI looks at trade expectations in the future, Sacci on Thursday also released its Trade Activity Index, or TAI, - a composite index of sales volumes, new orders, supplier deliveries, inventory levels and employment.

The TAI investigated trade conditions in November, finding they remained subdued and in negative territory.  The seasonally adjusted index improved by one point to 43 in November 2019. 

During November, sales volumes, new orders, and prices were sustained. Black Friday, while not having a noticeable effect in the survey as it took place late in November, would nevertheless have had a positive impact on sales volumes in the last week of the month, according to the TAI report.

The employment sub index was virtually unchanged at 40, but the survey found that employment opportunities remain tight as the sub-index on employment prospects for the next six months decreased to 38 from 40. The survey found that the property market for offshore properties was active. At the same time, the domestic housing market was described as "depressed" due to uncertainty about expropriation legislation.

* Compiled by Carin Smith

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