Pretoria - Trade conditions improved in May, the South African Chamber of Commerce and Industry (Sacci) announced on Wednesday.
The seasonally adjusted Trade Activity Index (TAI) gained 5 points to measure 56 in May. The better conditions are in correspondence with the relatively strong growth in the wholesale and retail trade, hotel and restaurant sector.
The non-seasonally adjusted TAI was at 55 in May 2012 compared to 48 in April 2012 and 49 in May 2011.
There was strong recovery in sales and new orders rising to 64 and 58 compared to 50 for both indices in April 2012.
The inventories index increased moderately to 51 from 47 in April following strong inventory build-ups in February and March. Supplier deliveries recovered by 6 index points. "The fewer trading days in April played a significant role in weaker trade activity in April 2012 compared to May," said Sacci in its monthly survey.
Indices for sales and input prices decreased from 63 and 72 in April to 59 and 68 respectively in May. Price pressures were moderated despite administered prices that rose by an average of 12%. The effect of the weaker rand is yet to trigger higher prices, noted Sacci.
Trade expectations remained positive but tapered down further in May 2012 with the Trade Expectations Index (TEI) at 57.7 points lower than in April. It was also 4 points lower than in May 2011.
"Expectations are following the same pattern as in 2011 where the initial bullish outlook was moderated during the year. Weak economic conditions will continue to weigh on trade conditions in the coming months."
In May, the six month outlook for components of trade activity contracted and sales and input price expectations eased to 61 and 68 compared to 68 and 75 respectively in April. Inventories are expected to decline further. Supplier deliveries remained in positive territory.
Additionally employment conditions in the trade environment worsened in May with the index having moved from 43 to 41 in negative territory. "The outlook for employment index weakened to 49, down from 55 in April.
Employment conditions in the trade environment worsened during May 2012 as the index moved from 43 to 41 in negative territory. The outlook for employment index weakened to 49 - down from 55 in April 2012.
The survey is conducted monthly and the results reflect business's view on South African trade conditions.
