Trade conditions maintaining positive trend

Despite some month-to-month volatility, trade conditions observed by the South African Chamber of Commerce and Industry’s (Sacci’s) surveys over the last 12 months have been positive, the organisation reported on Tuesday as it published its July Trade Activity Index (TAI).

The July TAI, which is calculated using Sacci’s monthly Trade Conditions survey, maintained the positive level of 55 observed in June, while the seasonally adjusted TAI recovered the one point lost between May and June to measure 57 in July.

The sales volumes and new orders subindices increased by three index points in July to 57 and 60 respectively, while the subindices on supplier deliveries and inventories declined by five and six index points respectively between June and July.

The decline in inventories in July followed a strong build-up in May and June.

Sacci noted that 66% of respondents polled in July indicated that sales prices had increased, compared to 64% in June, while rising input costs were experienced by 77% of the respondents in July as opposed to 71% in the prior month.

This increased from the 66% of respondents indicating rising input prices in July 2012.

Meanwhile, fuel prices, which increased by 21.7% year-on-year, and other administered prices, which increased by 7.5% year-on-year, continued to increase at rates notably higher than general inflation.

“Despite some negative indicators, the survey revealed that respondents were more positive about trade prospects for the next six months than about the current situation,”Sacci said in a statement.

Both the unadjusted and seasonally adjusted trade expectations indices measured 63 in July, while respondents’ outlook for sales volumes and new orders were slightly more positive in July than in June.

The pressure on input and sales prices was expected to remain high, with the subindices on price expectations at 78 and 67 respectively. Meanwhile, employment conditions in the trade sector appeared to be stabilising, with the July level remaining at 50.

The employment prospects index declined to 52 in July from 54 in June, which further supported a stabilising employment environment.

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