Tuesday, July 13, 2010

Trade conditions tighten according to SA Chamber of Commerce and Industry (Sacci)

The SA Chamber of Commerce and Industry (Sacci) released the results of its Trade Conditions Survey for June 2010.

The Trade Activity Index (TAI), which reflects current trade conditions, dipped by three index points to 48 in June 2010 as the World Cup 2010 took centre stage.

"Although World Cup-related trade might have increased substantially, intermediary trade and other forms of trade have receded and contributed to the decline in the TAI."

Sacci said the build-up in trade activity witnessed in the May TAI was not followed through in June.

"Businesses had geared up sufficiently to meet additional demand from visitors and demand from visiting consumers did not exceed expectations."

The TAI was nonetheless still nine index points higher than in June 2009, Sacci said.

Trade expectations, as measured by the Trade Expectations Index (TEI), remained at 61 in June 2010, but were below the highs at the end of 2009 and beginning of 2010.

The majority of the sub-components of trade activity, with the exception of supplier deliveries and inventories, were responsible for the milder trade conditions in June 2010, Sacci said.

The sales volumes sub-index lost seven points and the sub-index on new orders lost five points.

The supplier delivery index increased from 44 in May 2010 to 46 in June 2010 and some re-stocking took place in June.

The index on selling prices declined from 54 to 52 in June 2010 and the input price index declined marginally by one point to 59 in June 2010, suggesting that inflationary pressures were easing further.

"With the TEI remaining on 61 it signifies that expectations on trade conditions are still high and are substantially better than a year ago when the TEI stood at 49," Sacci said.

Sales expectations increased while the outlook on new orders was also more positive than last month.

Respondents expected lower price pressures towards year-end.

Current employment conditions in the trade environment deteriorated as the employment sub-index moved further into negative territory at 46 in June 2010 -- losing two index points.

The employment prospects index, however, remained in positive territory but declined to 50 in June from 51 in May 2010, Sacci said.