The South African Chamber of Industry and Commerce’s (Sacci’s) Trade Activity Index (TAI) rose to 41 in May, from 37 in April, while the Trade Expectations Index (TEI) rose to 49, from 39 in April.
The respondents in Sacci’s trade survey indicated that the election results had improved expectations for better economic conditions and the business climate in the short-to-medium term.
The chamber noted in a statement on Wednesday that the seasonally adjusted TAI for May had increased by one index point compared with April and was also one index point higher year-on-year.
Sacci said a tough environment in the wholesale, retail, hotel and catering sector was evident in a 0.6% decline in the first quarter of the year, compared with the first quarter of last year.
Foreign trade had also contracted in the first quarter.
Respondents in the TAI cited pressing issues in May as the lack of policy implementation, industrial protests, uncertainty during the election period, lower disposable household income, high unemployment, uncertainty on power supply and high fuel prices.
Sacci said that, although pressure on input prices remained, the weak current trade conditions caused further pressure on sales prices. The expectations for lower sales prices persisted despite the expectation that input costs would continue rising over the six-month scope of the survey.
Around 78% of respondents anticipated rising input costs.
Supplier deliveries improved slightly in May, while sales volumes and new orders were expected to advance close to and into positive territory.
The employment subindex improved by ten index points month-on-month in May and expectations for appointments in the current trade environment over the ensuing six months increased by six index points to 41.
“These were encouraging indicators for the months ahead.”