Hard financial times continue
TRADE conditions have been tighter since April, the South African Chamber of Commerce and Industry (Sacci) said yesterday.
Although the seasonally adjusted Trade Activity Index (TAI) recovered by five points to 50 last month, it remained below levels achieved earlier in the year. A year ago the seasonally adjusted TAI stood at 48.
The non-seasonally adjusted TAI remained in negative territory last month at 49, up from 45 in July.
Sacci said trade conditions continued to be volatile, but the activities surveyed were converging around the 50 index level, as was notably the case with sales and new orders.
Sales and input prices were stable, as the sales price index rose by one point to 58 and the input price index declined marginally to 65 from 66 in July this year.
Although price pressures at present remained at bay, cost increases of especially administered prices were more than double that of the producer inflation rate.
The weaker trade conditions made it difficult to cope with these rising costs. The latest year-on-year rise in the pump price of diesel was 17.6%.
The six-month trade expectations index (TEI) was down by about 10 points from earlier this year. The TEI remained at 54 last month after average levels above 60 up to June.
The uncertainty about real spending by households, tight investment spending and slow- ing global trade adversely impacted on trade expectations.
Retail sales volumes were maintained by household borrowing, increasing by about four percentage points more than consumer inflation.
The six-month outlook for the key components of trade activity confirmed the tentative nature of current trade conditions. After picking up in June, the sales and new order expectations indices remained at lower levels of 64 and 56 respectively last month.
The volatile trade conditions also led to anticipated lower inventory holdings.
Employment prospects declined slightly as the index lost two points to register 48 -about the same as the level last year in August. – Sapa