Although trade conditions improved in May, with the South African Chamber of Commerce and Industry’s (Sacci’s) seasonally adjusted Trade Activity Index (TAI) rising to 50, from 47 in April and 48 in May 2015, trade conditions remained muted.
Respondents to the survey attributed the muted trade conditions to a lack of government support, slow economic growth, unaccountability by politicians and officials, disruption by electioneering and seasonality of business.
The new orders subindex improved notably from 41 in April to 50 in May and the sales volumes subindex improved from 51 to 59.
The inventories index dropped by three points to 47 in May but supply deliveries improved from 44 to 50.
The price subindices declined as both sales prices and input prices eased in May, with the sales price index six points lower month-on-month at 65 and the input price index five points lower at 80.
Price expectations also slowed, with the sales price index declining by ten points to 69 and input price expectations slackened with the index declining from 85 to 78.
Stable interest rates and a possible stronger and less volatile rand, given the unchanged credit rating by the ratings agencies, inspired hope for improved economic conditions, stated Sacci.
Trade expectations moved into a positive area and could mean better trade conditions towards year-end. The seasonally adjusted Trade Expectations Index (TEI) improved to 55 in May from 49 in April.
All trade components moved into positive territory with only employment prospects in negative territory.
Government, labour and business’s commitment to contribute to reviving economic growth towards year-end should be positive for domestic trade conditions.