Current trade conditions, as indicated by the Trade Activity Index (TAI), dipped to 45 in August from 49 in July, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.
“The August 2010 TAI is a marginal improvement over the 44 of August 2009, but stands in contrast to the recent high of 56 in March 2010.”
Sacci said the TAI was in negative territory for the third consecutive month since May.
All the major components of trade activity had deteriorated in August 2010, with a marked decrease in sales volumes from 55 in July to 50 in August.
“This does, however, remain five points higher than the 45 for the sales volume index in August 2009.”
Sacci said the supplier delivery index decreased from 47 in July to 44 in August, while de-stocking continued.
The index on selling prices increased from 49 in July to 50 in August, and the input price index increased by two points to 60 in August, implying that inflation may start bottoming out.
The Trade Expectations Index (TEI) declined from 64 in July to 61 in August, indicating that although expectations on trade conditions were still high, trade conditions might be easing further in the first quarter of 2011.
“It was noticeable that the indices of expectations on new orders and inventories each decreased by five index points to 63 and 49 respectively in August 2010.”
Sacci said the supplier deliveries index remained unchanged,
Inflationary expectations increased, as both the indices on selling and input prices increased by two and four index points respectively.
The increase of four index points in the input price expectations index was much higher than the average of a half-a-point increase per month in the past year.
“The inflationary pressure is mostly of a cost-push nature,” Sacci said.
Employment conditions in the trade environment deteriorated further as the employment sub-index moved deeper into negative territory by two index points to 43 in August.
The employment prospects index (six months hence) remained marginally in positive territory at 51. — Sapa