Johannesburg - Trade conditions returned to positive territory in May, the SA Chamber of Commerce and Industry (Sacci) said on Wednesday as it released its monthly Trade Conditions Survey.
The Trade Activity Index, which reflects current trade conditions, recovered by 4 index points to 51 in May, following the impact of fewer trading days in April 2010, Sacci added in a statement. "The TAI is 11 index points higher than in May 2009, but trade expectations, measuring 61 in May 2010, were down from the highs expected at the end of 2009 and in the beginning of 2010."
Sacci said the majority of the sub-components of trade activity, with the exception of employment and inventories, contributed to improved trade conditions in May 2010.
The sub-index on sales volumes recovered 10 of the 15 index points lost in April 2010, when the index dropped to 48. The new orders index recovered 8 of the 14 points lost in April 2010, and the supplier deliveries index recouped only 2 of the 10
points surrendered in April.
The index on selling prices remained on 54 in May 2010, but the input price index declined marginally by two points to 60 in May 2010, suggesting that inflationary pressures are fairly stable.
According to Sacci, the Trade Expectations Index (TEI) maintained a high of 61 in May 2010, but had receded slightly since
"The TEI, anticipating the period before year-end, indicates that economic conditions will moderate after emerging from a few
months of stronger performance immediately prior."
Sales expectations dipped somewhat while inflationary expectations for the last quarter of 2010 would be contained, Sacci
Current employment conditions in the trade environment declined into negative territory in May 2010 as the employment index lost four points to 48.
The employment prospects index declined to 51 in May from 54 in April 2010 but remained in positive territory, supporting a forecast of new employment opportunities in the trade environment, Sacci added.