Despite dropping two points to 51 in October, the South African Chamber of Commerce and Industry’s (Sacci’s) Trade Activity Index (TAI) remained in positive territory, a trend that was expected to continue in the short term.

Sacci on Wednesday reported that the TAI had declined from the September level of 53 points, but registered its second month in positive territory since November 2007.

The index had seen a steady recovery from the low of 32 points recorded in April this year and was expected to maintain positive levels as the trade environment created greater activity over the festive season and into 2010.

The sales and new orders subindices had also slowed slightly during October, each dropping by four points to 56 points and 51 points, respectively.

However, the sales subindex was 11 higher than the 45 points registered in August, while the new orders subindex had improved well above the low of 34 points recorded in June.

The supplier deliveries subindex increased by two points to 51 in October, indicating a further easing of supply conditions, noted Sacci.

It added that the marginal decline in the inventory index to 48 points, down from 50 points in September, was still ten points higher than in August 2009, which further endorses improved trade conditions and the rebuilding of stock.

The index on selling prices declined to 49 points, down from 50 points in September, while the input price index declined by two points to 52 in October.

“Inflationary pressures therefore appear to be easing after failing to find direction in the August 2009 survey,” stated Sacci.

Meanwhile, respondents to the survey had remained optimistic about the expected trade conditions in the coming six months, despite the Trade Expectations Index (TEI) dropping to 55 points in October, compared with the 59 points recorded in September.

“The October TEI figure appears to be correcting an overly optimistic outlook but nonetheless remains in positive territory,” the chamber noted.

Sales expectations pulled back to 64 points in October, down from 70 points in September. Expectations for new orders registered 58 points, down five points from the 63 points recorded in September.

The index on prospects for supplier deliveries had remained relatively flat in October.

“Although there is a positive outlook for trade conditions six months hence, inflationary expectations for the next six months are growing. The indices on expected input prices remained unchanged and sales prices increased by three points to 59 – the highest since the 60 [points] of February,” Sacci noted.

It explained that the expected higher selling prices were partially as a result of increased input costs, including higher electricity tariffs, salaries, and fuel prices, as well as lower turnover volumes.

Sacci, meanwhile, pointed out that the current employment conditions index had remained flat at 45 points in October, while the employment prospects declined to 45 points, down from the 48 points registered in September.

This was, however, well above the low of 39 points recorded for the employment prospects in February.