Trade conditions improved from September to October but expectations for the next six months are moderate, the South African Chamber of Business (Sacob) said on Friday.
The Trade Expectations Index — which gauges business’s expectations for trade conditions six months ahead — declined to 62 in October, from 65 in September and 68 in August, according to the Absa/Sacob trade conditions survey.
The Trade Activity Index — which measures the view of business on current trade activity — stood at 58 in October, compared with 54 in September.
”Although favourable trade conditions are likely to occur during the holiday period in December, general expectations are that the robust trade conditions experienced to date have been replaced by moderation with positive prospects,” said Sacob economist Richard Downing.
A total of 65,6% of respondents reported an increase in sales volumes in October, while 60% did so in September.
October orders were however ”markedly less” than the 62% who reported improved order books in May 2006. This might suggest that the improved trade conditions for October would not gather momentum.
Inflation expectations for the next six months declined as fewer respondents saw selling and purchase prices increasing.
Absa chief economist Christo Luüs said the survey thus far showed little of the effects of the 150 basis points increase in interest rates since June this year.
”Strong credit growth conditions are also a reflection of this. With price pressures being felt, especially on inputs and expectations of further increases to come, the monetary tightening phase can be expected to continue into 2007,” he wrote in a
statement. – Sapa