Pretoria - Trade conditions remained subdued in May, said the South African Chamber of Commerce and Industry (Sacci).
“Trade conditions remained subdued in May 2015 with the seasonally adjusted composite Trade Activity Index (TAI) in negative territory registering 48 compared to 51 in April 2015,” said Sacci in its trade conditions survey on Thursday.
Seasonal factors influenced trade conditions but only marginally so in April and May.
The non-seasonally adjusted TAI remained at 49 in May 2015 and at the same level as in May 2014. While trade conditions remained stable but passive in May, six month expectations improved somewhat.
The sales volumes sub-index improved slightly by one index point from 51 in April 2015 and was marginally above the downward trend that commenced at the beginning of 2012.
New orders also remained weak and the sub-index decreased slightly to 49 from 50 in April 2015. New car sales in particular, as with retail trade, are facing headwinds as households are finding it difficult to make ends meet.
However, strong growth in new vehicles exports continued during the month of May. The possibility of rising interest rates also dampened trade conditions. Although supplier deliveries improved from 44 to 45, it inhibited trade conditions. The inventories index was stable at 54 in May 2015.
Sales prices eased a bit with the sales price index declining to 59 from 62 in April, while input prices declined by 4 points to 65.
“The weakening rand against major trading currencies and a somewhat higher US dollar crude oil price is of concern,” said Sacci.
The recommended increase of 25% in electricity tariffs could cause serious structural disruptions in the trade environment on input and output. The continuing weakening of the rand also remains a serious concern for trade given the high import propensity with large volumes of inputs and consumer goods that are imported.
Price expectations toughened further in May as notably sales price expectations rose from 64 to 67 while the input price expectations index remained at a high 72.
In contrast to present trade conditions (TAI), the seasonally adjusted trade expectations index (TEI) increased by 4 points to 58 from 54 in April 2015. Expectations for sales volumes remained unchanged at 62 in May 2015.
Current employment prospects remained negative with the sub-index at 46 - down from 47 in April, but with the employment expectations sub-index better at 47 from 45 in April 2015. - SAnews.gov.za
