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Trade Conditions Dive In April, With Little Hope They Will Improve Soon

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18 May 2020 – Trade conditions worsened in April during the harshest weeks of SA’s stage-5 lockdown, with little expectation that they will improve in the coming months, data from the SA Chamber of Commerce and Industry (Sacci) showed on Thursday.

The trade conditions survey – which measures conditions across a range of sectors – fell to the lowest levels on record

“Trade conditions were badly affected and called for extraordinary efforts by businesses to keep afloat,” the chamber said in a statement. Respondents also called for an end to the lockdown as they “cannot afford to continue”, the chamber said.

“Respondents accept a calculated but balanced risk to unlock the economy,” Sacci said.

The trade conditions survey includes two indices that measure trading activity and expectations of conditions in the coming six months.

The seasonally adjusted Trade Activity Index (TAI) declined by 11 points to 26 in April while the seasonally adjusted Trade Expectations Index (TEI) dropped by 10 index points to 31.

Both indices range between 0 and 100, with 50 as their neutral mark — anything lower than 50 is deemed to be a negative reading

The data follows the announcement by President Cyril Ramaphosa on Wednesday night that the country would move to level 3 of lockdown at the end of May — apart from those areas where coronavirus infections are highest.

The president has also promised changes to level 4 regulations, which would expand permitted business activities in the retail space and e-commerce, and reduce restrictions on exercise.

Though SA has been operating at a marginally less strict level-4 lockdown since the start of May, that damage to the economy is expected to be deep, prompting growing calls for the government to reopen it.

Estimates done by the UN University World Institute for Development Economics Research suggest that, depending on the extent and the duration of the lockdown, the economy could shrink between 5.4% to 16.1% in 2020. Source (Business Live)