Trade conditions slumped in April to their lowest level, according to the South African Chamber of Commerce and Industry’s monthly Trade Conditions Survey released on Wednesday.
The Trade Activity Index (TAI), which measures current trade conditions, fell to 32 in April from a low of 38 in March.
”The month of April 2009 had three working days fewer than April 2008 and this effect was visible in the April 2009 survey results,” Sacci said.
All the demand sub-components of trade activity were down by a substantial margin in April 2009.
The sub-index on current sales volumes, the new orders sub-index, and the backlog sub-index all declined by more than six index points. Although supplier deliveries also slowed, inventory levels were maintained.
”The ‘loss’ of trading days had an impact on all trade activity components,” Sacci said.
However, the declining price pressures continued to be a positive theme in the April survey.
”Inflationary pressures continue to ease as the index on selling prices once again decreased and measured 48 in April [the lowest since September 2003] compared to 54 in March 2009.”
According to the survey, the input price index decreased by a 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.
Respondents were optimistic about the coming six months with the Trade Expectations Index (TEI) up to 48 in April from 43 in March.
”The outlook for trade appears to be more upbeat and is supported by an uptick in business confidence in April 2009,” Sacci said.
It noted that global trade and global economic conditions were showing some signs of relief.
The expectations for sales were 10 points up in the survey and back into positive territory at 54, while new orders followed and improved their position by five index points.
According to the survey, the expected deliveries sub-index also improved by three points to 45 in April.
Sacci said inflationary expectations remained restrained as the index on expected input and sales prices each dipped by six and five points respectively in April.
”This implies that inflation is expected to decline in the next six months [range of survey].
”The stronger rand could assist in curtailing the prices of imported goods and services, notably fuel,” Sacci said.
Current employment conditions in the trade environment remained unchanged in the survey, while employment prospects [expectations] also remained weak and in negative territory. — Sapa