Local trade conditions have remained in negative territory in April, with the South African Chamber of Commerce and Industry’s (Sacci’s) Trade Activity Index (TAI) weakening further to 45 from 46 in March.
The index has remained below the neutral 50-point level since October 2016.
However, the seasonal adjusted TAI improved by two index points to 45.
The seasonally adjusted Trade Expectations Index (TEI) weakened further, by two index points, to 49, in April – the first time since April 2016, after recovering to a level of 61, in February, that the seasonally adjusted TEI moved into negative territory.
“It appears that peripheral matters to trade were still weighing heavily on trade conditions in April,” said Sacci.
Respondents mentioned that extraneous factors such as emigration, political uncertainty, higher unemployment and crime are impeding trade, while uncertain economic and business conditions result in staff retrenchments and less credit availability.
Further, large shifts in the currency value made it difficult to conduct international trade. Improved marketing and larger export penetration were positive counter actions.
Recent sales volumes were notably hard-hit as the sales volumes index decreased from 52 in March to 44 in April, while the new orders index dipped by three points to 40. The expectations for sales volumes index remained low at 55 in April, after reaching 73 in February, while the expectations for new orders index also declining further from 53 to 50 in April.
The inventory index improved to 47 from a stalled level of 40 in March. The selling price index increased slightly to 62 from 61 while the input price index declined to 62 from 63 in March.
Although still high, the price indices could imply that inflation is stable at present. Inflationary expectations indices remained high but reasonably stable, at 69 and 76, respectively, for the selling and input price indices in April.
The employment subindex remained on 48 in April but was lower than the 50 of April 2016. The employment diagnosis in the trade environment for the next six months remains weak and is cause for concern as the employment expectations index stayed put at 43 in April.