Trade conditions remain in positive territory

Wednesday, March 13, 2013

Pretoria- Trade conditions remained in positive territory in February at about the same level as in January 2013, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.

“Trade conditions remained in positive territory in February 2013 and at about the same level as in January 2013.  The strong improvement of the Trade Activity Index (TAI) from 42 in December 2012 to 52 in January 2013 was followed by a lateral move to 51 in February 2013,” said Sacci.

In its monthly Trade Conditions Survey, the seasonally adjusted TAI declined by five index points to 49 in February from 54 in January. The chamber noted that trade conditions declined between January and February whereas there is usually a strong increase in the TAI between February and January.

“The decline in the seasonally adjusted TAI this month is concerning when contextualised against the depressed business climate as reflected by the SACCI Business Confidence Index.”

In February all sub-components of trade activity were marginally lower than in January apart from supplier deliveries that improved to 53 from 47 in January. There appeared to be some inventory accumulation in February 2013 as the index improved further to 53 from 51 in January 2013. 

Trade prospects (Trade Expectations Index) for the next six months remained good although the TEI declined slightly from 65 to 63.

“The seasonally adjusted TEI registered 61 in February 2013 and was above the 59 of December 2012, but 3 points lower than in February 2012.”

Current and expected input prices continued to escalate and both indices increased by 2 points to 73 and 81, respectively. The impact of the continuing weakening of the rand on import bills for fuel and capital equipment substantially increases the projections for higher inflation. 

Employment conditions in the trade environment remained tight in February 2013 with the index moving deeper into negative territory from 49 in January 2013 to 45.