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The SACCI Trade Conditions Survey Trade Activity Index (TAI) at 47 for July 2017 reflects reserved trade conditions with the TAI still below 50.  The seasonally adjusted TAI, however, improved by a further two index points to 51 in July from 49 in June 2017 and was also 3 points higher than in July 2016.

Since March 2017, the seasonally adjusted Trade Expectations Index (TEI) decreased by 11 index points after the index reached a high of 61 in February 2017. The seasonally adjusted Trade Expectations Index (TEI) like the TAI also measured 50 in July compared to 52 in July 2016. The slow growing economy is leaving its mark on trade conditions while challenging economic expectations continue to depress trade prospects.

The subdued economic conditions, burdensome administration and red tape, tight market conditions, keen market prices, and low disposable incomes are adding to the woes in trade conditions. The lower interest rates announced by the Reserve Bank provide some relief to trade conditions, but it needs a more vibrant economy to improve real trade conditions.

Sales volumes slipped in July with the sales volumes index declining by one point to 54. The new orders index however declined to 43 - confirming cautious trade expectations.  Expected sales volumes improved marginally with the index up by 2 index points to 54 in July 2017. Expectations for new orders also rose to 50 from 47 in June 2017, a modestly good sign.

The inventory index increased notably to 51 from 43 in June 2017 after lower stock levels were recorded in May and June 2017. The selling price index declined due to competitive pricing while the input price index virtually remained unchanged at 64. 

Although still high, the price indices confirm lower inflationary pressures with the sales price expectations index remaining at 64 points in July 2017, but with input prices expected to rise as the index increased to 73 from 71 in `June 2017.

The employment sub-index decreased to 43 in July 2017 – 4 index points lower than in June 2017, and the employment outlook for the next 6 months suggests this will remain under pressure as the employment expectations index decreased by 3 index points to 43 in July 2017.

Issued by SACCI