Trade conditions remain positive

Trade conditions remained positive in June although international and retail trade are tightening, the SA Chamber of Commerce and Industry (Sacci) said on Thursday.

   

Sacci's non-seasonally adjusted trade activity index (TAI) dipped slightly from 56 in May to 55 in June.

   

The TAI, with seasonal adjustments, dipped one point to 56 in June, after declining by eight points in May, said Sacci economist Richard Downing.

   

"A positive trend in trade conditions can be observed since October 2012 although it is characterised by volatility.

   

"With households under pressure from high debt levels and associated debt service costs, rising prices and with global economic growth under strain, trade conditions are likely to tighten somewhat in the second half of 2013."

   

Two sub-components of trade activity -- sales volumes and inventories --declined between May and June this year.

   

All the other components remained almost unchanged.

   

Backlogs on orders increased from 44 to 50 in June.

   

Browning said 78 percent and 68 percent of respondents respectively expected input and sales prices to rise in the second half of the year.

   

"The pressure from input costs on sales prices remained high with a seven points differential between the sales price index of 64 in June 2013 and the input prices index of 71," he said.

   

The six-month trade expectations index (TEI) averaged 63, the same as for the first half of last year.

   

Browning said the prospects for sales volumes, new orders, inventories and supplies remained well inside positive territory.

   

Employment conditions in the trade environment remained on the margin in June at 50.

   

The six month employment prospects index improved to 54 in June from 51 in May 2013.

   

This signalled greater job creation prospects in the sector just before year-end.

   

-Sapa