Trade activity improved substantially in October, with the South African Chamber of Commerce and Industry’s (Sacci’s) seasonally adjusted Trade Activity Index (TAI) having increased to 54 points, compared with 48 points in September.

Sacci stated that the TAI had been subdued since December 2013, having hovered around the 50-point level for most of this year.

“The dramatic improvement in trade activity in October occurred while the economy remained subdued and major trading partners are either experiencing slower growth or struggling to gain economic momentum. The financial position of households has also not improved,” the chamber pointed out.

The sales volumes and new orders subindices improved to 60 points and 58 points respectively in October, up 13 and 11 points month-on-month.

“Increases in supplies, backlogs on orders and inventories supported the improvements in sales volumes and new orders,” Sacci said.

Further, price pressures from inputs eased, with this subindex having declined, from 68 in September, to 63 in October, while the sales price index remained at 55 points. 

“Although subdued trade conditions continued to contain price pressures, improvements in trade conditions, not commensurate with tight supply conditions, might create room for higher inflationary expectations,” Sacci noted.

Meanwhile, expectations for both higher sales and input prices increased as these subindices of the Trade Expectations Index (TEI) rose to 67 and 75 points respectively.

Respondents kept to their positive outlook on trade conditions for the coming six months, as the seasonally adjusted TEI improved 65 points in October, compared with 62 in September.

The employment conditions subindex of the TAI increased to 52 in October, while the prospects for employment remained unchanged as the employment expectations subindex of the TEI remained at 53.Trade activity rebounds in October