The South African Chamber of Commerce and Industry’s (Sacci’s) seasonally adjusted Trade Activity Index (TAI) increased marginally to 56 in December, compared with 54 in November.

The nonseasonally adjusted TAI was also four points above the TAI of December 2013.

Although trade remained depressed and unease prevailed about export volumes and low fixed investment spending, import volumes, new vehicle sales and better retail sales volumes facilitated positive trade, compared with earlier in 2014.

Less disrupted trade conditions, owing to electricity supply in December, also contributed to the positive outcome. “Electricity power constraints have a debilitating consequence for trade conditions as it constrains the supply and outlet chain,” Sacci stated.

Taking into account seasonal factors, sales volumes were slightly lower in December than in November; however, sales volumes were more positive than in December 2013, while the new orders subindex improved by six index points compared with December 2013.

Supplier deliveries slumped owing to lower business activity in December but inventories were nearly unchanged at 60 index points. Further, backlogs on orders declined.

The inputs and sales price indices each increased by two index points.

According to Sacci, tight trade conditions continued to contain price pressures, but the weaker rand and the high import propensity for durable goods would induce further inflationary pressures. The substantially lower fuel price would counter some cost pressures and, owing to leads and lags, would take time to filter through to sales prices.

Expectations for both sales and input price increases were higher as the respective indices increased in December. Losses owing to power failures and lower output were also expected to put pressure on input costs.

The Trade Expectations Index was sensitive to, for instance, future electricity supply continuity and declined to 56 in December, from 61 in November. This was also down from the 65 recorded in October.

Employment conditions in the trade environment improved in December, owing to temporary staff being employed in the retail sector. The six-month prospects for employment remained positive, with the expectations index having increased to 53 in December.