Johannesburg - The unadjusted Trade Activity Index (TAI) improved by nine index points in October, the SA Chamber of Commerce and Industry (Sacci) said on Tuesday.
"The TAI surprised by exceeding the key level of 50 by a notable margin in October," it said in a statement.
"The October 2014 TAI level of 57 is one index-point below the TAI of 58 in October 2013.
"The dramatic improvement in trade activity in October occurred while the economy remained subdued and major trading partners are either experiencing slower growth or struggling to gain economic momentum."
The TAI was adjusted to 54 in October 2014 due to seasonal factors.
"Even so it is a much improved level compared to the 48 in September 2014."
The sales volumes and new orders sub-indices recovered further by being 13 and 11 points higher respectively in October after both indices recovered to 47 in September.
"Price pressures from inputs eased as the index declined from 68 to 63 while the sales price index stayed at 55," Sacci said.
"Although subdued trade conditions continued to contain price pressures, improvements in trade conditions, not commensurate with tight supply conditions, might create room for higher inflationary expectations."
Expectations for higher sales and input prices increased as the indices rose from 60 and 70 to 67 and 75 correspondingly.
Respondents to Sacci's trade survey kept a positive outlook on trade conditions for the coming six months as the seasonally adjusted expectations index improved from 62 to 65 in October 2014.
The employment conditions index in the trade environment increased from 47 in September to 52 in October 2014 while the employment expectations sub-index remained at 53 in October 2014.