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The business environment remained conducive to improved business activity but trade conditions continued to be restrained with the level of the Trade Activity Index (TAI) of SACCI’s Trade Conditions Survey for March 2018 measuring 43 after the 44 in February 2018. The six month Trade Expectations Index (TAI) was down to 52 in March 2018 after recording 59 in February 2018. 

However, sales volumes, supplier deliveries and inventories were the more positive components of trade in March 2018. The TAI was 3 index points lower in March 2018 than a year ago but the TEI (expectations) stayed in positive territory at 52 – nearly the same level as in March 2017.

Retail trade notably remained constrained with global trade prospects still positive with commodity prices benefiting exports. The stronger rand inhibited import rand prices while exports lost some competitive pricing edge with the stronger rand. Specific factors listed by respondents that kerb trade activity are the increase in VAT to 15%, the higher fuel levy, strikes and property damage, and inappropriate skills in certain sectors. However, respondents still have positive expectations from the new political leadership and its ability for economic policy formulation.

Sales volumes improved in March 2018 with the sub-index 3 points higher on 46 but the new orders index down by 6 points to 35. Expected sales volumes and expected new orders were both lower – sales from 64 to 58 and new orders from 63 to 51 respectively in March 2018. Expected inventories to remain virtually unchanged in six months with the index at 53.

The sales price index measured 59 (sharply up) and the input price index 72 – also notably up. This increases were probably caused by the introduced taxes and levies in the Budget and might be of a temporary nature and once-off.  Price expectations however kept to the same levels as last month.  The narrowing gap between the sales and input price indices confirms the effects of costs and administered pressures on prices.

The employment sub-index declined to 42 in March 2018 while the employment outlook index for the next 6 months also declined by 7 index points to 46 in March 2018. 

Issued by SACCI