South Africa’s trade conditions have improved marginally, the South African Chamber of Commerce and Industry (SACCI) said on Friday.
According to the results of its monthly survey, the Trade Activity Index (TAI) picked up slightly in July 2008 to register 43.
This followed a steady decline from 50 in February 2008 to 42 in June.
”These levels continue to reflect tight trade conditions,” SACCI said.
The sub-index on current sales volumes, after recording a relatively solid level of 55 in February, deteriorated progressively to 42 in June, but recorded a mild improvement to 45 in July.
The new-orders sub-index also confirmed a slightly better mood in a depressed trade climate, and rose to 42 in July from 40 in June.
The Trade Expectations Index (TEI), which explores trade conditions six months ahead, gradually declined to 46 in June from a high of 58 in February.
However, the TEI improved to 50 in July and broke the downward trend that began in February 2007, showing a decline from a high of 70 in January 2007, to the 46 in May and June this year.
”It implied somewhat better trade prospects towards the year end,” SACCI said.
Although trade prospects might stay subdued over the short-term, there could be an improvement in the medium to longer term.
The sub-index on sales expectations improved slightly to 52 in May, falling to 51 in June and picking up to 56 in July.
The index on expected new orders also improved by five index points to 51 in July after recording 46 in May and June.
Inflationary pressures eased as the index on selling prices dipped to 68 in July from 74 in June, still eight points above the relatively low index level of December 2007. The input price index was down to 81 in July from 84 in June, but still 14 points higher than the low of 67 in December 2007.
The expected input and sales price indices stayed virtually the same, suggesting that rising prices would still be a strong possibility over the next six months (survey period) as fuel and food prices, although rising at a slower pace, were increasing much faster than average inflation.
The July employment index remained on 44 in July after being at 50 as recently as January.
Employment prospects in the trade environment recovered to 46 in July from 45 in June, but remained well in negative territory. — Sapa