Improved November trade conditions bucked an expected moderating trend and were pointing to a buoyant Christmas period, a survey released on Wednesday found.
The November Absa-South African Chamber of Business (Sacob) Trade Conditions Survey index showed trade conditions at a second-best level since the survey’s launch in 2000.
”It has turned out that trade conditions have once again bucked the expected moderating trend and may be heading for a bountiful holiday period,” said Richard Downing, Sacob economist.
This followed a sharp pick-up in October.
”Conditions will probably only start to retract from the middle of the first quarter of 2007,” Downing said.
Christo Luüs, Absa chief economist, said the deterioration is likely with a tighter monetary policy and expectations of a further rise in inflation.
There is some pessimism in the outlook for trade conditions next year, he said.
Most respondents expected improvements over a six-month period but the ratio had dropped since the first half of 2006.
”This could point to the perception that tighter monetary policy conditions will in 2007 have some negative effect on trading conditions, including sales volumes.”
The survey uses two indicators — the Trade Activity Index (TAI) and the Trade Expectations Index (TEI) — to evaluate trade conditions within the South African business environment on a monthly basis.
The TAI is a composite index of sales volumes, new orders, supplier deliveries, inventory levels and employment levels while the TEI measures trade-condition prospects for the next six months.
In November the TAI and the TEI measured 60 and 63 points respectively. — Sapa