The South African Chamber of Commerce and Industry’s (Sacci’s) Trade Activity Index (TAI) declined from 54 to 49 in April, indicating the influence of fewer trading days owing to public holidays.
The TAI also declined substantially by 12 index points between April 2014 and April 2013, Sacci said.
The seasonally adjusted TAI, however, increased slightly by one index point to 51 during April.
Retail sales, which played a significant role in trade conditions, only increased by 1.6% year-on-year in April, with real lending to households having declined by 1.2%.
“Household spending, reflecting 45% of the demand in the economy, the decrease in real household credit and the tight financial circumstances facing households play an important role in current trade conditions,” Sacci said.
Meanwhile, the sales volumes subindex declined by 11 index points in April to 48, with the new orders subindex also in negative territory at 49, indicating that trade conditions remained vulnerable. However, inventories and supplier deliveries remained relatively stable and positive, Sacci said.
Further, the sales and input price indices declined from recent high levels.
“Although cost pressures appear to be easing, the sales price index at 64 and the input price index at 74 still indicate broad-based price pressures in the trade environment,” the chamber said, adding that the rand exchange rate continued to improve in April 2014 and presented the prospect of lower cost pressures in terms of imports.
Sales and input price expectations also eased substantially from the beginning of the year in April, but remained high at 67 and 77 respectively.
Meanwhile, the seasonally adjusted trade expectations index declined in April for the first time this year to 56, from 58 in March 2014, and compared to 62 a year ago.
Expectations for the sales component of trade activity declined from 67 to 64 but expected orders remained unchanged in April.
Current employment conditions remained in negative territory in April with the index at 49, while the prospects for employment in the trade sector deteriorated considerably from 54 in March to 46 in April.