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Trade conditions strained – Sacci

Trade conditions strained – Sacci

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11th June 2014

By: Creamer Media Reporter

  

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Trade activity across a spectrum of sectors, including retail trade, vehicle sales, exports and imports, and expenditure on capital goods and services remains subdued, with the South African Chamber of Commerce and Industry’s (Sacci’s) seasonally adjusted Trade Activity Index (TAI) for May standing at 50 points.

This represented a notable seven-point drop from the May 2013 index level of 57.

The unadjusted TAI, meanwhile, remained at 49 points in May.

The sales volumes subindex improved by four index points to 52, while the new orders subindex remained unchanged at 49. There was nonetheless an increase in inventory levels as supplier deliveries improved to 58.

“The passive levels of activity reflected in components of trade are indicative of lacklustre trade conditions currently,” the chamber noted in a statement on Wednesday.

Sacci further pointed out that price pressures were seemingly declining owing to the depressed trade conditions, with the sales and input price indices having retreated from the high levels experienced as recently as January this year.

The sales price index declined by seven index points between January and May to 63 and the input price index declined to 72 from 80 in March.

Higher financing costs were, however, exerting added pressure on trade volumes, the chamber stated.

"The inability of traders to transmit cost pressures might lead to a less viable business environment if conditions do no improve soon. The rand exchange rate improved further in May and, although this contributed to the prospect of lower imported cost pressures, the rand has since come under renewed stress,” Sacci said.

Price expectations, notably sales, rose slightly in May and remained high, but were still down on the high inflationary expectations of December 2013/ January 2014.

Meanwhile, the seasonally adjusted trade expectations index increased by one point month-on-month and remained at a moderate level of 59 in May. This was, however, down four points from the level of 63 in May 2013.

Expectations for the sales component of trade activity declined further from 64 in April to 61 in May, and expected orders fell by four index points to 59.

Current employment conditions deteriorated slightly to 48 from 49 and remained in negative territory. The prospects for employment in the trade sector improved slightly to 48 after the subindex deteriorated considerably from 54 in March to 46 in April.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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