South African businesses are optimistic about trade conditions in the next six months and hiring more employees, in spite of weak sentiment at the end of 2023.
The latest survey by the SA Chamber of Commerce and Industry (Sacci) on trade conditions indicated a slight improvement in the trading climate for November and December 2023, though respondents generally still perceived the conditions as fragile.
Sacci yesterday said that 38% of businesses surveyed expressed positivity about the conditions in December, and 43% anticipated improvements in the next six months.
Seasonally adjusted expectations saw a minor decline from 51% in October to 50% in December.
However, 64% of businesses viewed trade conditions in December 2023 as worse than in December 2022, as the majority of reported lower sales volumes.
Sacci economist Richard Downing said although input cost increases seemed to have eased, poor demand restrained the rise in sale prices, and expectations were negatively influenced by constrained holiday spending, particularly in financially pressured households.
Downing said despite the prevailing weak trade conditions, seasonally adjusted expectations for the next six months verged on a positive scenario.
“The ongoing decline in new vehicle sales serves as a leading indicator, signalling potential challenges for the economy. Retail trade volumes are also showing a negative trend, but foreign trade and inward tourism have positively impacted trade in the short and medium term,” he said.
“November's Black Friday did not significantly boost trade, with more concern centred around rand volatility and exchange rate fluctuations. Although input cost increases have moderated, some still face price hikes of up to 12%.
“Electricity supply remains a hindrance to trade, yet businesses have explored alternative supply routes. Seasonal patterns play a notable role in November/December trade conditions, and stifled economic prospects, along with current political manoeuvring, contribute to uncertainty.”
According to Sacci, the weak trade conditions have impacted employment opportunities in this sector.
However, seasonal employment led to businesses hiring temporary staff in December, causing the employment index to rise from 34% of respondents in October to 40% hiring new staff in December.
Looking ahead, Sacci said 43% of respondents were considering hiring additional staff in the next six months.
BUSINESS REPORT