South Africa’s trade conditions deteriorated into negative territory in June 2025, with only 46 percent of businesses reporting positive trading conditions compared to 56 percent in March, according to the South African Chamber of Commerce and Industry survey.
The Trade Conditions Survey revealed concerning trends as global trade uncertainty and domestic economic challenges including sluggish growth and high unemployment rates continue affecting business confidence. The deterioration represents a significant reversal from the promising positive momentum experienced earlier in the year.
Future business outlook also declined with 62 percent of respondents anticipating improved conditions over the next six months, down from 69 percent in May. This decreased optimism reflects growing concerns about both domestic economic performance and external market uncertainties affecting trade prospects.
“Despite the downturn, a slight majority—51 percent—indicated that trade conditions in June 2025 were better than during the same period in 2024,” noted the South African Chamber of Commerce and Industry, providing some historical context for the current performance.
Economic indicators show mixed signals with consumer inflation stable at 2.8 percent and producer inflation remaining low at 0.1 percent. However, rising municipal tariffs and property taxes threaten to distort inflation expectations and complicate prospects for interest rate reductions.
The rand strengthened approximately 1.5 percent against the US dollar in June, helping mitigate the impact of rising fuel prices on the broader economy. This currency appreciation provides some relief for importers and helps contain inflationary pressures from external sources.
Real interest rates remain elevated, contributing to the deteriorating trade outlook expectations as businesses anticipate lower sales volumes and reduced supplier deliveries. The high interest rate environment constrains business investment and expansion plans across various sectors.
Despite the challenging overall environment, some positive developments emerged including an 18 percent year-on-year increase in new vehicle sales, 5 percent growth in retail sales, and 3 percent rise in overseas tourist arrivals. These indicators suggest resilience in consumer-facing sectors.
However, concerning declines appeared in merchandise export volumes falling 10 percent year-on-year and building plans passed decreasing 16 percent year-on-year. These contractions highlight the uneven nature of South Africa’s economic recovery and trade performance.
Economics professor Waldo Krugell emphasized the need for rapid implementation of government reforms, particularly regarding Transnet operations and small business deregulation, to restore business confidence and improve trade conditions.
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