SACCI trade index shows little change

THE South African Chamber of Commerce and Industry’s (SACCI’s) trade activity index , which reflects the survey on current trade conditions, remained virtually unchanged at 39 last month after measuring 40 in May.

Trade conditions remain depressed and in negative territory — below 50 index points. However, current levels do point to a gradual recovery in the index from the low of 32 in April, the SACCI said.

The sales and new orders sub- components were slightly down on May levels and remained in negative territory. The sub-index on current sales volumes, which gained 15 points in May , lost three index points last month to measure 42 points.

The new orders sub-index, which gained 9 points in May , declined 4 points to 34 last month. Supplier deliveries improved from 38 to 41 last month, while backlogs rose marginally. Selling prices rose marginally last month from 49 to 50 while the input price index increased by 6 points to 62. Inflationary pressures do nonetheless appear to be contained as prices of imported producer goods declined nearly 17% in May and prices of locally produced goods 3% in May.

Respondents were more optimistic in their six-month outlook and the trade expectations index (TEI) was higher at 49 last month compared with 46 in May. The TEI has been on an upward trend since April. Sales expectations improved; the subindex was 6 points up on the May level of 50 and well into positive territory. Expectations for new orders also improved by six index points to 53 in May while prospects for supplier deliveries gained 5 index points.

“There is a more positive outlook for most aspects of trade conditions six months hence. Inflationary expectations for the next six months (scope of survey) were lower and the indices on expected input and sales prices declined by five and one point respectively last month .

“Notwithstanding higher expectations on inflation in the May survey, inflationary expectations receded somewhat in the June survey. The direction of inflation, however, seems uncertain given some administered price shocks announced last month.

“Current employment conditions in the trade environment remained weak at 38 for the employment index last month while the employment prospects sub-index declined to 41 that month from 43 in May,” the SACCI said. I-Net Bridge