Trade conditions positive in April, says SACCI

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Trade conditions remained positive in April, the South African Chamber of Commerce and Industry (SACCI) said on Thursday.

Despite the decline in the seasonally adjusted Trade Activity Index (TAI), conditions remained positive in April. The seasonally adjusted TAI lost eight points to measure 51 in April.

“Trade conditions remained positive in April 2012, despite the decline in the seasonally adjusted [TAI]. Despite the fact that the non-seasonally adjusted TAI decreased by 12 points from March 2012 to 48 in April 2012, it is at a higher level than a year ago when the TAI stood at 45,” said SACCI in its Trade Conditions Survey.

According to the survey, sales and new orders weakened to 50 from strong levels of 66 and 63 respectively in March. For April, the sales volume index reached 46, while the new orders index was at 45 points.

In April, the inventories index declined to 47 from 59 in March following strong inventory build-ups in February and March 2012. 

“The fewer trading days in April played a significant role in weaker trade activity in April 2012 compared to March.”

Sales and input prices indices were virtually unchanged at 63 and 72 in April confirming that price pressures remain high.

“The increase in administered prices by more than 11% (on average) is worrying, while looming demands for increases in the wage rate that are much higher than the inflation rate is cause for concern,” said SACCI.

Meanwhile, trade expectations continued on the high levels recorded since the start of the year falling three points lower than in March to 64 in April. 

“The accommodating financial environment remains conducive to a positive trade outlook with credit extended to businesses increasing by nearly 12% year-on-year in March 2012 (latest figure),” noted the survey.

The six month outlook for key components of trade activity contracted to some extent in April and the sales and input price expectations remained high at 68 and 75 points compared to March’s 69 and 75 respectively.

“Expected inventories and supplier deliveries fell but remained in positive territory,” said SACCI.

The employment conditions in the trade environment dipped in April as this index moved back into negative territory from 53 to 43. “Expectations on employment conditions remained positive at 55 up from 54 in March 2012 and 52 in April 2011,” it said. 

The Survey is conducted monthly and the results reflect business's view on South African trade conditions.  

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