/ 13 March 2008

Trade conditions out of negative territory

Trade conditions appear to be out of negative territory after the Trade Activity Index (TAI) increased for the third month in a row, the South African Chamber of Commerce and Industry (SACCI) said on Thursday.

The TAI, which measures the view of business on current trade activity, increased from 44 in December last year to 48 in January and 50 in February, said SACCI economist Richard Downing.

”This latest survey result points towards a possible bottoming of trade conditions that slowed substantially towards the end of last year,” he said in a statement.

The TAI’s current sales volumes sub-index improved from an ”exceptionally low” 41 in December 2007 to 47 in January and a stronger 55 in February.

The new orders sub-index followed a similar recovery, but not as strong as that of sales.

Downing said inflationary pressures remained a problem and appeared to be gathering momentum.

The index on selling prices rose to 74 in February 2008 after increasing from 60 in December 2007 to 70 in January. This was the highest level for the index since April 2002.

Business expectations of trade conditions in the next six months, as measured by the Trade Expectations Index (TEI) also appeared to be stabilising at a ”somewhat improved level”.

The TEI recovered to 58 in February from 54 in January. In July 2007 it was at 67. It fell to 57 in December that year.

Employment prospects, however, remained in negative territory in February 2008 as the index improved only marginally from 48 to 49. – Sapa