Sacci Trade Activity Index still below 50 points

THE SOUTH African Chamber of Commerce and Industry (Sacci) Trade Activity Index (TAI) for July stood at 47 points, and still reflected constrained trading conditions by recording a figure below 50 points.

“The slow growing economy is leaving its mark on trade conditions while challenging economic expectations continue to depress trade prospects,” the chamber said.

However, the seasonally adjusted TAI had improved by two index points to 51 points in July from 49 points in June and was also 3 points higher than in July 2016.

Sacci added that the other index like the seasonally adjusted Trade Expectations Index (TEI) was also on the decline, having shed 11 points since March, after it reached a high of 61 points in February.

The seasonally adjusted TRI like TAI measured 50 points in July compared to 52 points in July 2016.

The chamber said the subdued economic conditions, burdensome administration and red tape, tight market conditions, keen market prices as well as low disposable incomes were adding to the woes in trade conditions.

However, the lower interest rates announced by the Reserve Bank provided some relief to trade conditions, but it needed a more vibrant economy to improve real trade conditions, it said.

Sales volumes had slipped in July with the sales volumes index declining by 1 point to 54 points. The new orders index, however, declined to 43 points. Expected sales volumes improved marginally with the index up by 2 points to 54 points in July. Expectations for new orders also rose to 50 points from 47 points in June.

The inventory index increased notably to 51 points from 43 points in June after lower stock levels were recorded in May and June. The selling price index declined due to competitive pricing while the input price index virtually remained unchanged at 64 points.

“Although still high, the price indices confirm lower inflationary pressures with the sales price expectations index remaining at 64 points in July, but with input prices expected to rise as the index increased to 73 points from 71 points in June,” the chamber revealed.

The employment sub-index decreased to 43 points in July, 4 points lower than in June, and the employment outlook for the next 6 months suggests this will remain under pressure as the employment expectations index decreased by 3 points to 43 points in July.

The country’s unemployment rate stands at 27.7 percent.