Cautious trade conditions remain

Cautious trade conditions remain
May 2019 Newsletter

Current trade conditions as reflected by the Trade Activity Index in April 2019, are marginally down from March 2019, but also slightly up from April 2018. The seasonally adjusted Trade Expectations Index for April 2019 was down from the previous month, and down from last year.

Respondents listed the hive of political activity and anxiety related to the then-upcoming 8 May 2019, coupled with the effects of public holidays on trading days, as matters that impacted the trade conditions in April 2019. The widely held view that the then-upcoming elections are responsible for the absence of such adverse events like load shedding when problems at Eskom persist and creates a cautious approach to immediate and short term business decision making, as businesses hedge against a possible risk that, now that the elections are over, adverse events would return. This caution is responsible for the trend of decrease in almost all the activity sub-indices to be uniform, moreover, in line with expectations in a month with lots of holidays.

Pressure on prices remained as indicated by lower sales and input price sub-indices. The decline in sales and input prices is expected to continue over the next six months notwithstanding 72% of respondents still anticipating input costs to rise. 34% of respondents were positive on future supply deliveries. The employment sub-index has dropped from 39 in March 2019 to 36 in April 2019. 35% of respondents indicated that they intend to employ more staff in the next six months.