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Sacci: Statement by The South African Camber of Commerce and Industry, on trade conditions (10/03/2010)

10th March 2010

By: Creamer Media Reporter

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/ MEDIA STATEMENT / The content on this page is not written by Polity.org.za, but is supplied by third parties. This content does not constitute news reporting by Polity.org.za.

The results of SACCI's monthly Trade Conditions Survey for February 2010 were released today.
The Trade Activity Index (TAI), which reflects current trade conditions, improved strongly to 54 in February, following a 42 in December 2009 and 44 in January 2010, the latter being months which were susceptible to seasonal influences. The TAI returned to positive territory and also improved on the 51 measured in November 2009. It is 13 points higher than a year ago. Sales and new orders were mainly responsible for the positive trade conditions as reflected by the TAI in February.
The sub-index on sales volumes increased by fifteen index points in February after declining by 14 index points to 45 in December 2009 and improving slightly to 46 points in January 2010. The new orders index improved by a successive 8 points to 55 in February from 39 in December 2009. The supplier deliveries index also improved by 8 points to 50 in February. The inventory index increased marginally to 47 in February suggesting that re-stocking may have slowed for now given the uncertainty about the strength of the economic recovery over the medium term.
The index on selling prices ticked up to 54 in February from 51 in January 2010. The input price index also increased by three points to 61 in February. This indicates that inflationary pressures are mounting particularly from input costs including the diesel price, which is now 15.1% higher than a year ago. Substantial direct and indirect electricity cost impacts will add to inflationary pressure in months to come.
Looking six months ahead, respondents remain optimistic. The Trade Expectations Index (TEI) stayed on a high level of 68 in February 2010 after measuring 67 points in January 2010. This positive outlook factors in the impact of the 2010 World Cup Soccer event as well as anticipated stronger economic recovery in the second half of 2010.
Sales expectations gained one point in February on a high of 76 recorded in January 2010. Expectations for new orders registered 70 - slightly lower than the 72 in January 2010. The index on six month prospects for supplier deliveries increased from 64 January 2010 to 67 in February.
The indices on expected selling and input prices for January 2010 suggest that inflationary expectations have declined in February 2010. The input price expectations index declined by two index points to 70 while the selling price expectations index declined by one point to 67 in February 2010.
Current employment conditions in the trade environment improved strongly in February 2010 as trade conditions, especially sales, increased considerably. The index rose by 7 points to 48 in February - suggesting fewer lay-offs. The employment prospects index increased to 57 in February after measuring 55 in January 2010. The index is well into positive territory for the fourth time since November 2009 and supports greater employment opportunities in the trade sector over the medium term.

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