The South African Chamber of Commerce and Industry (Sacci) on Wednesday forecast its Trade Activity Index (TAI) to improve in the medium term, despite the index remaining flat at 51 points in November.

The index in November recorded its third consecutive month in positive territory.

The TAI recorded its first move into positive territory since November 2007, when it reached 53 points in September this year. It dropped back to 51 points in October.

However, the index had seen a steady recovery from the low of 32 points recorded in April, and Sacci noted that trade expectations would likely improve at a "robust" pace in the medium term.

The sales volumes subindex improved by three points to 59 in November, while the new orders subindex remained flat at 50 points.

The supplier deliveries subindex declined to 48 points in November, compared with 51 points in October and the 49 points recorded in September.

Although this subindex was back in negative territory, Sacci explained that supply conditions were not under strain, but that this was rather a seasonal phenomenon of the preholiday period.

Further, the chamber noted that the marginal decline in the inventory subindex to 47 points, compared with 48 points in October and 50 points in September, still left inventory levels seven points above the 40 points recorded in July.

The index on selling prices had remained at 49 points in November, while the input price index increased by one point to 53 points in November. Inflationary pressures therefore remained mild, given that tight trade conditions did not allow for abnormal price setting, Sacci stated.

Meanwhile, the chamber highlighted that respondents to the survey were now more optimistic as the Trade Expectations Index (TEI), which looked at expectations for the six months ahead, jumped eigth points higher to 63 points in November.

Sales expectations surged ahead by ten points to 74 points in November, with the expectations for new orders increasing by nine points to 67 points.

Sacci pointed out that the supplier deliveries subindex of the TEI had also improved notably to 61 points, compared with 55 points in October.

Expectations for lower inflation over the next six months, however, weakened, Sacci said.

The subindex on expected selling prices increased by eight points to 67 points in November, in part as a result of expected increases in input costs , such as electricity tariffs, salaries and the fuel price, as well as lower turnover volumes, the chamber stated.

Meanwhile, the current employment conditions in the trade environment had rremained "virtually unchanged", measuring 46 points in November, compared with the 45 points registered in September and October.

The employement prospects subindex had, however, improved to 52 points, up from 45 points in October. This was the first since August 2008 that this subindex was in positive territory.