Economy

Trade conditions improve slightly

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17 June 2011

Trade conditions improved moderately in May, the South African Chamber of Commerce and Industry (SACCI) said on Wednesday.

"Current trade conditions, as reflected by the Trade Activity Index (TAI), recovered moderately to a seasonally adjusted 50 from a low 47 in April 2011. The seasonally adjusted TAI stood at 52 in May 2010 and was nine points above the April 2009 level of 41," SACCI said.

In May, the sales volumes index recovered to 56, following April's level of 46. All other components of trade activity improved, but new orders remained subdued at 46 in May after dropping to 45 in April.

The input price index declined further by four points after declining by six points in April 2011. Sales prices also declined by three index points to 58 from 61 in April 2011.

However, the index on employment conditions in the trade environment in May was 47, up from 45 in April 2011, while the employment prospects index registered 49 and moved into negative territory from 52 in April 2011 and 53 in March 2011.

Overall expectations positive

Overall trade expectations remained in positive territory as the Trade Expectations Index (TEI) registered 61 which is the lowest level to date in 2011.

The sales expectations index declined to 72 while the expected new orders index remained unchanged at 68. The expected supplies index remained roughly unchanged at 55 while the expected inventories index fell to 50 in May from 54 in April.

Price indices on sales and inputs eased by four and six points respectively, to 63 and 68, which is the second consecutive month where price expectations were lower.

"Although the increase in the diesel price slowed somewhat from 23% to 21% year on year, the tariff increases in public utilities increasing by 26% year on year indicate that trade margins will come under strong pressure," said SACCI.

Source: BuaNews