Business

Trade conditions turn favourable in March

Staff Reporter

Trade conditions continued to improve in March after moving into positive territory in February, as reflected in the Trade Activity Index from Sacci.

Trade conditions continued to improve in March after moving into positive territory in February, as reflected in the Trade Activity Index (TAI) released by the South African Chamber of Commerce and Industry (Sacci) on Wednesday.

“The non-seasonally adjusted TAI increased by three points from 57 in February to 60 in March 2012,” Sacci said in a statement.

When adjusted for seasonal factors, the TAI was 59 in March, up from 56 the previous month.

“A year ago the TAI dipped to 54 in March 2011 from 56 in February 2011,” Sacci said.

In January, the TAI was neutral at 50. Prior to that it had been in negative territory—below 50—since March last year.

Sacci conducts the survey among companies monthly to assess business’s view of South African trade conditions.

Composite index
The TAI is a composite index of sales volumes, new orders, supplier deliveries, inventory levels and employment.

Sacci said sales remained strong at 66, as well as new orders at 63.

The inventories index declined slightly to 59 following increases in both January and February 2012.

“Supplier deliveries remained strong but decreased slightly to 56,” Sacci said.

The index for current sales prices remained unchanged at 64 in March but the input price index increased to 72 from 69.

“The latest levels acknowledge rising price pressures and the latest fuel price increase, the introduction of new toll fees and tariff increases for municipal utilities services, will have a further negative effect on input prices with downstream consequences for inflation,” Sacci said.

“The price rises will have a real impact on the spending power of already hard hit consumers and businesses.”

High levels
The Trade Expectations Index (TEI)—which looks at conditions expected in six months time—remained at 67, the same high level as in February.

The TEI for the first quarter of the year averaged 65, compared to 64 in the same quarter last year.

“The prospects of interest rates remaining unchanged in 2012 are a contributing factor to higher trade expectations,” Sacci said.

The six month outlook for key components of trade contracted marginally in March 2012.

Sales expectations at 69, and input price expectations at 76, remained high, but were slightly lower than the previous month.

Sacci said the employment conditions in the trade environment improved in March 2012 as the index moved into positive territory from 47 to 53.

Expectations on employment conditions were positive, although down by one point to 54.—Sapa

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