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Trade conditions had started to recover in October, after suffering a setback in August and September, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.
The Trade Activity Index (TAI) measured 58 in October, up from the TAI of 51 and 52 reported in September and August respectively, Sacci economist Richard Downing said at a press conference at the chamber’s Rosebank offices.
Sacci’s Trade Conditions survey showed a seasonally adjusted TAI of 55 during October, compared with the 50 recorded in September and 53 in August, and remained at a “better” level than in October 2012, with an index of 50, and October 2011, with an index of 48.
October’s sales volumes had “recovered nicely” at 61, moving back to levels reported in May, while new orders improved to 60, Downing noted.
Sales volumes and new orders had registered at 49 and 47 respectively in September.
The survey found that inventories declined from 57 in September to 54 in October, while supplier deliveries rose to an Index of 57 in October, up from 51 in September.
“Sales and input prices rose faster in October, with input price increases being experienced by 75% of the [survey’s] respondents. With more price pressures, inflationary expectations are likely to rise,” Downing pointed out.
However, the Trade Expectations Index (TEI) survey’s price expectation indices on sales and inputs eased at 67 and 74 respectively in October, from 70 and 77 respectively in September.
Downing explained that lower fuel-price hikes, a slower rate of increase in other administered prices and slowing prices for imported goods, as well as a stronger rand:dollar exchange rate, could contribute to lower input inflation.
Sacci’s TEI contracted slightly from 59 in September to 57 in October, with the seasonally adjusted TEI remaining static at an index of 59.
However, the TEI pointed to “stickier” trade conditions within the next six months, with contraction in activity.
In October, TEI sales volumes and supplier deliveries declined two index points to 63 and 55 respectively, while new orders fell one index point to 59.
Employment in TAI and TEI remained steady during October, slipping one index point each to 53 and 51 respectively.