Trade conditions remained depressed in June, according to the monthly Trade Conditions Survey released by the SA Chamber of Commerce and Industry (Sacci) on Tuesday.
The Trade Activity Index (TAI) — which measures current trade conditions — remained virtually unchanged on 39 in June 2009 after measuring 40 in May 2009, Sacci said.
”Trade conditions remain depressed and in negative territory, that is below 50 index points,” Sacci said.
However, current levels pointed to a gradual recovery in the index from the low of 32 in April.
According to Sacci, the sales and new orders sub-components of trade activity were slightly down on the May 2009 levels and remained in negative territory.
The sub-index on current sales volumes, that gained 15 points in May 2009, lost three index points in June 2009 to measure 42 points.
Sacci said the new orders sub-index, that gained nine points in May 2009, declined by four points to 34 in June 2009.
However, supplier deliveries improved further from 38 to 41 in June 2009 while backlogs on orders rose marginally.
According to Sacci, selling prices rose marginally in June from 49 to 50 while the input price index increased by six points in June 2009 to 62.
Inflationary pressures however, appeared to be contained as the prices of imported producer goods declined by nearly 17% in May 2009 and the prices of locally produced goods declined by 3% in May 2009.
Sacci said respondents were more optimistic in their six month outlook and the Trade Expectations Index (TEI) was higher at 49 in June compared to 46 in May 2009.
The TEI had been on an upward trend since April 2009, Sacci said.
”Sales expectations improved; the sub-index was six points up on the May 2009 level of 50 and well into positive territory,” it said.
Expectations for new orders also improved by six index points to 53 in May 2009 while the index on the prospects for supplier deliveries, gained five index points.
”There is a more positive outlook for most aspects of trade conditions six months hence.
”Inflationary expectations for the next six months [the scope of the survey] were lower and the indices on expected input and sales prices declined by five and one point respectively in June 2009,” Sacci added.
Notwithstanding higher expectations on inflation in the May 2009 survey, inflationary expectations receded somewhat in the June 2009 survey, Sacci noted.
The direction of inflation, however, seemed uncertain given some administered price shocks announced in June, Sacci said.
Current employment conditions in the trade environment remained weak at 38 for the employment index in June 2009 while the employment prospects sub-index declined to 41 in June 2009 from 43 in May 2009, Sacci said. – Sapa