Industry organisation the South Africa Chamber of Commerce and Industry’s (Sacci’s) December 2023 survey on trade conditions indicated a slight improvement in the trading climate for November and December, but respondents generally still perceived the conditions as fragile.

In December, 38% expressed positivity about the conditions, and 43% anticipate improvements in the next six months.

Seasonally adjusted expectations saw a minor dip from 51% in October to 50% in December.

Notably, 64% viewed trade conditions in December as worse than the previous year’s corresponding period.

During December, 67% reported lower sales volumes, while 37% experienced increased new orders.

Although input cost increases seemed to ease, poor demand restrained the rise in sale prices.

Expectations were negatively influenced by constrained holiday spending, particularly in financially pressured households, Sacci points out.

Despite the prevailing weak trade conditions, seasonally adjusted expectations for the next six months (within the survey scope) verge 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, Sacci avers.

It highlights that 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, Sacci says.

It explains that seasonal patterns play a notable role in November and December trade conditions, and stifled economic prospects, along with current political manoeuvring, contribute to uncertainty.

Sacci says the weak trade conditions have impacted on 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, it highlights.

Looking ahead, 43% of respondents are considering hiring additional staff in the next six months.