Trade conditions in March remained slack, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.
Sacci’s Trade Activity Index (TAI) — which measures current trade conditions — showed that in March, not only were conditions slack, but they were also well into negative territory.
”The TAI slipped to 38 in March after a slight improvement to 41 in February 2009,” Sacci said.
It added that the TAI had been in negative territory since December 2007.
”It appears that trade conditions find it difficult to pick up the necessary momentum to move into positive territory despite an easier financial environment.
”It appears that conditions will only improve once real overall economic activity picks up,” Sacci said.
A recovery might therefore take longer and might not come about through monetary policy actions alone, it added.
All the demand sub components of trade activity declined in March, Sacci said.
The sub-index on current sales volume, the new orders sub-index, and the backlog sub-index all declined by four points in March 2009, it added.
Supplier deliveries also deteriorated.
”Trade conditions are thus affected across a broad base.
”The only positive feature of the March 2009 Survey is declining price pressures,” Sacci said.
It noted that inflationary pressures continued to ease as the index on selling prices once again decreased and measured 54 in March compared to 55 in February 2009.
The input price index decreased by a relatively larger margin of four index points thereby indicating lower inflationary pressures in the trade environment.
”The input price index is now considerably lower than its high of 84 in June 2008,” Sacci said.
Looking six months ahead, survey respondents remained pessimistic and the Trade Expectations Index (TEI) dipped to 43 in March 2009 from 44 in February 2009, Sacci added.
”The outlook for trade appears to be uncertain as business and consumer confidence remained pressured.
”Global trade and global economic conditions are playing a bigger part than anticipated.”
According to Sacci, the expectations for sales were lower in the March 2009 survey.
New orders seemed to have maintained their position implying confidence by respondents might improve in six months, it said.
”Respondents, however, do expect to encounter hitches from suppliers as the expected deliveries sub-index decreased by three points in March 2009 to 42,” Sacci noted.
Inflationary expectations remained restrained as the index on expected input and sales prices each dipped by two points in March 2009.
”This implies that inflation will continue to decline in the next six months.
”The stronger rand will assist in restraining the prices of imported goods and services, notably fuel.”
Sacci said current employment conditions in the trade environment had deteriorated again in March 2009, while employment prospects had decreased further from an already weak departure point in the February 2009 Survey. — Sapa