Trade conditions barely remained in positive territory in September, the South African Chamber of Commerce and Industry (Sacci) stated on Tuesday, reporting that its Trade Activity Index (TAI) deteriorated to 51 points for the month, down from a high of 61 points in April.

The TAI for September declined by one point from the 52 recorded in August; however, it was still four points above the reading of 47 for September 2012.

Sacci pointed out that the seasonally adjusted TAI decreased by three points from August to measure 50 in September, while the sales volumes and new orders indices were in negative territory.

“After the seasonally adjusted TAI averaged 52 in the first quarter of the year, it recovered to 59 in the second quarter, only to return to 53 in the third quarter,” the chamber pointed out.

Further, even though the supplier delivery subindex returned to positive territory, the inventory subindex increased owing to negative sales volumes in September.

Meanwhile, only 68% of respondents experienced rising input costs in September, as opposed to 77% in August, Sacci said, adding that while this suggested lower inflation, the price expectations on sales and inputs remained almost unchanged in the high ranges of 70 and 77 respectively.

While fuel price increases were relatively low, with diesel increasing 11% year-on-year in September, as opposed to 22% year-on-year in August, an acceleration in other administered prices and the prices of imported goods, which increased by 11% each year-on-year, continued to contribute to higher input costs.

The trade expectations subindex declined to 59 in September, after measuring 61 in August, with the outlook for sales volumes, new orders and supplies pointing to less optimistic trade conditions over the next six months.

Inventories were unchanged at 54 index points.

Further, employment conditions in the trade activity index remained marginally positive with the September index at 54 compared to 51 in August. The employment prospects subindex also improved marginally from 51 in August to 52 in September suggesting expected stable employment conditions in the trade environment in the short term.

“This slight improvement in employment came about despite strikes in the automotive industry that had a damaging effect on the export of vehicles in September and the export market,” Sacci said.