Trade activity bounces back

Johannesburg - The SA Chamber of Commerce and Industry's (Sacci's) Trade Activity Index (TAI) rose seven points to 56 in February from 49 in January.

Sacci said comparable levels were last seen in November 2010.

The February 2011 TAI is two points above the February 2010 level and 15 points above February 2009 level.

Sacci said improvement in trade conditions appeared to be on course following a two-month set back.

The sales volume index of the TAI regained pace in February to measure 62 after it dropped to 50 in January.

The other components of trade activity all improved on the January levels and were comparable with the strong levels of November 2010, Sacci said.

Price indices for current sales and input prices increased further in February after rising substantially in January.

The input price index rose by 4 points in February after a 7-point increase in January, while the sales price index rose 3 points to 59 compared with a 5-point increase in the previous month.

Trade conditions, which measure trade conditions six months ahead, continued to improve and measured 65 in February after the 64 recorded in January 2011.

The expectation indices on sales volumes and new orders maintained their January levels while the backlog on orders improved.

The indices on supplier deliveries and inventories were marginally down. The price expectations indices also increased by 5 and 3 points for selling and input prices respectively.

Sacci said, however, that the outlook for inflationary pressures deteriorated considerably since the end of 2010.

The index on employment conditions in the trade environment broadened to 51 from 47 in January and entered positive territory for the first time since the pre-strike season in April 2010.

The employment prospects index registered 54, an indication that it remained in positive territory in February and gained further on the six-month outlook.