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The uncertain global trade climate, the restrained real local economic performance and excessive unemployment represent a compounded negative effect that has led to the present deteriorating trade conditions in South Africa. The SACCI Trade Conditions Survey for August 2025 receded from a seasonally positive position in July caused by relief with further interest rate cuts and monetising pension fund investments.

This had a positive short-term financial effect on household disposable income. The reality of the real economy under considerable stress and its effect on trade, however, resurfaced strongly in August. Whereas respondents experienced positive conditions in March, April and July 2025, a reality check kicked in during August 2025 with only 40% of respondents to the SACCI Survey having a positive overall trade experience. See attached Infographic.

Sixty-nine percent of participants in May expected trade conditions to improve over the next six months, but in August 2025 only fifty-eight percent of the respondents were positive about trade in the six months ahead. The real effect of global trade uncertainty and the direct and multiplying effect it has on local businesses has lately surfaced through announcements of local and global businesses terminating or decreasing their exposure in South Africa. It therefore appears that actions need to be urgently taken to address the present negative business and economic impact and urgently direct policy to prevent the situation from escalating.

Consumer inflation that stayed low at 3.5% in July 2025 and producer inflation measuring 1.5% contributed to some positive views on spending by households and producers. The lowering of notably the diesel price should have a positive effect on input costs. Rising municipal tariffs and property taxes will, however, distort inflationary expectations and thus may disturb the prospects for lower interest rates. The agreement between the SA Reserve Bank and Treasury on Inflation Targeting should bring more certainty to inflationary expectations.

According to the SACCI Survey for August 2025, the trade outlook for the next six months deteriorated over all the elements of trade. Whereas 67% of the respondents were positive about the trade outlook six months ago, 58% had a positive six-month outlook in August 2025. Expectations on sales volumes weakened notably along with rising input costs on the cards.

Lower interest rates and trade activities like increased new vehicle sales, rising volumes of merchandise imports, increased inward overseas tourists, increased real value of building plans passed, and rising share prices on the JSE - all contributed to positive business sentiment. However, a serious reminder should be noted of the encompassing real economic performance and global business and investor sentiment. Worrying trends of merchandise export volumes and real retail sales that declined however imply that the business environment and global trade may become exceedingly perplexing.

Notwithstanding the unstable and varying trade conditions, respondents did not indicate adjustments to employment of staff - now or in the next six months.

Issued by South African Chamber of Commerce and Industry