Trade conditions slump – Sacci

Trade conditions slumped last month, falling by 10 points on the Trade Activity Index (TAI) compared with April 2013, the SA Chamber of Commerce and Industry (Sacci) said on Tuesday.

“Conditions deteriorated to 51 in September, following a high of 61 for the TAI recorded in April 2013,” it said in a statement.

The seasonally adjusted TAI which indicates how businesses feel about current trading conditions averaged 52 points in the first quarter of 2013, then recovered to 59 in the second quarter, but reached only 53 in the third quarter of 2013.

The seasonally adjusted TAI dropped three points from August 2013 to measure 50 in September, while TAI without seasonal adjustment fell one point from the previous month to 51.

Therefore, trade conditions barely remained in positive territory, the Sacci said. The sales volumes and new orders indices were in negative territory for September 2013.

“Although the supplier delivery index returned to positive territory, the inventory index increased due to negative sales volumes in September 2013,” Sacci said.

The survey’s respondents indicated lower sales and input price increases in September. Fewer respondents 68 percent experienced rising input costs in September 2013 compared to 77 percent in August.

“Although this suggests lower inflation, the price expectations indices on sales and inputs remained almost unchanged, in the high ranges of 70 and 77 respectively.”

Relatively lower fuel price increases, offset by an 11 percent acceleration in other administered prices and prices of imported goods, contributed to higher input costs.

The trade expectations index (TEI), which is based on measures including expectations of sales volumes, new orders and inventory levels, declined from 61 points in August to 59 points in September, remaining in positive territory.

The outlook for sales volumes (negative three points), new orders (negative six points), and supplies (negative three points) indicated less optimistic trade conditions in the next six months. Inventories remained unchanged at 54 index points.

Employment conditions in the TAI remained marginally positive, with the September 2013 index at 54, compared to 51 in August 2013.

The employment prospects index also improved by one point from August to 52 in September. This suggested expected stable employment conditions in the trade environment in the short-term.

“This slight improvement in employment came about despite strikes in the automotive industry that had a damaging effect on the export of vehicles in September 2013 and the export market,” Sacci said.


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