Trade conditions in South Africa appear in negative territory

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Neren Rau, CEO of South African Chamber of Commerce and Industry’s (Sacci) said trade conditions appeared to be settling in negative territory, posing a threat to the country's economy. Neren Rau, CEO of South African Chamber of Commerce and Industry’s (Sacci) said trade conditions appeared to be settling in negative territory, posing a threat to the country's economy.

Trade conditions in September 2012 weakened, with the South African Chamber of Commerce and Industry’s (Sacci’s) seasonally adjusted the Trade Activity Index (TAI) weakened by four index points to 46 following the recovery by five points to 50 in August 2012.

The non-seasonally adjusted TAI also remained in negative territory at 47 index points in September, declining from 49 in August 2012, Sacci said.

The TAI looks primarily at the movement of goods from manufacturer to wholesaler, to retailers and consumers.

Sales and new orders were in negative territory for the last three months and registered 47 and 46 points respectively.

The inventories and the supplier deliveries indices remained almost unchanged, at 47 and 49 index points respectively.

Sales and input prices continued to be stable between August and September 2012.

Sacci CEO Neren Rau said trade conditions appeared to be settling in negative territory, posing a threat to the country's economy.

"The increase in certain labour costs (above 12% year-on-year) and the weakening of the rand (some 18% in the past 30 days), if sustained, could have adverse consequences for inflation and trade conditions in South Africa," he said.

Rau said the uncertain conditions in the South African economy since the middle of August 2012 would affect the outlook for trade conditions in the next six months, with the Trade Expectations Index possibly ending the year in negative territory.

"The strike in the transport industry contributed to higher inventory holdings of 45 compared to 41 in August 2012. Supplier deliveries were not expected to be negatively affected at this stage as the index remained at 51," he said.

Employment conditions in the trade environment remained unchanged and in negative territory as the employment index stood at 48 points.


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