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Trade conditions remain strained, index shows

Trade conditions remain strained, index shows

Photo by Bloomberg

15th April 2015

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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JOHANNESBURG (miningweekly.com) – The South African Chamber of Commerce and Industry’s (Sacci’s) seasonally adjusted composite Trade Activity Index (TAI) declined by one index point month-on-month to 47 in March, reflecting uncertain economic prospects and depressed private and public spending.

The March TAI was also three points below that of March 2014.

The seasonally adjusted trade conditions index had declined by nine index points since December, while encouraging indications were provided by the sales volumes subindex, which rose four index points in March to 55 and kept first-quarter sales in positive territory.

New orders also improved in March but were slightly below the prior year’s level.

“Global and domestic trade appears to be facing headwinds from underperforming global trade partners and real household and public sector spending is under pressure. Debt levels remain a serious constraining factor.

“Even the supplier deliveries index, which seldom dips below 50, registered only 42 in March. The inventories index declined by five index points to 48 in March, indicating expected weaker demand,” the chamber said in a statement.

Sacci added that the weaker trade conditions did not ease price rises, as both the sales and input price indices rose to 62 and 70 respectively in March.

“This is of concern, given that, even with the lower fuel price, businesses could not absorb other price pressures, such as labour and electricity disruption costs.

“Given the high import propensity of the South African economy, the overall weaker rand is impacting on higher import prices. The disruptions to the economy caused by continued strike action, threats thereof and radical political posturing, create a less optimal trading climate,” it maintained.

Meanwhile, price expectations softened further, with both the sales and input price expectations indices retracting in March to 63 and 69, after already declining to 67 and 69 respectively in February.

In following the TAI, the seasonally adjusted trade expectations index also declined by one point to 52 in March, while expectations for sales volumes declined by three index points to 58 for the month.

Expected and current employment conditions also weakened, declining by two and four index points respectively to 50 and 46.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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