Trade conditions nearing ‘desperate levels’ – Sacci
The South African Chamber of Commerce and Industry (Sacci) has warned that trade conditions are approaching the "desperate levels" experienced towards the middle of 2009 after the great recession of 2007/8.
The seasonally adjusted composite Trade Activity Index (TAI) measured 39 in December, down from 42 in November, and was 17 points lower year-on-year.
The TAI’s yearly average was 47 in 2015, compared with the average of 50 in 2014.
The nonseasonally adjusted TAI declined to 33 in December, compared with 48 in December 2014.
“Real domestic final demand, as well as lower export volumes reflect a dull economic environment. The higher interest rates, the much weaker rand exchange rate, debt-strapped consumers and the lower credit rating further add to depressed trade,” stated Sacci.
The sales volumes subindex fell to 30 in December, from 46 in November and new orders declined by 18 points to 26 – indicating that only 26% of the respondents experienced rising orders in December.
Supplier deliveries dropped to 29 from 44 in November, while the inventories subindex fell to 43, from 52 in November.
The sales price subindex increased by three points to 60, while the input prices subindex rose to 69 – reflecting rising price pressures in December.
Trade expectations for the next six months were, meanwhile, likely to remain subdued and confirmed the declining expectations in the second half of 2015.
The seasonally adjusted Trade Expectations Index (TEI) moved further into negative territory to 42 in December, from 49 in November.
Sales and new order expectations declined by one point each in December from 44 and 39 respectively in November. Price expectations were much more negative, with the sales price expectations subindex having risen eight points, while input price expectations increased by nine index points to 78.
The employment situation in the trade sector dipped to 47 in December as the employment subindex declined by two index points. The subindex on employment prospects fell nine points to 47.
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