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Cape Town - The slow growing economy is leaving its mark on trade conditions while challenging economic expectations continue to depress trade prospects, the SA Chamber of Commerce and Industry (SACCI) said on Tuesday.
SACCI's latest Trade Activity Index (TAI) reflects reserved trade conditions, with the TAI stubbornly staying below 50. The TAI came in at 46 for July.
The seasonally adjusted TAI, however, improved by a further two index points to 51 in July from 49 in June 2017 and was also three 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 TEI, like the TAI, measured 50 in July compared with 52 in July 2016.
"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 SA Reserve Bank (SARB) provide some relief to trade conditions, but it needs a more vibrant economy to improve real trade conditions," SACCI said in a statement.
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. Expectations for new orders also rose to 50 from 47 in July, "a modestly good sign".
The inventory index increased notably to 51 from 43 in July 2017 after lower stock levels were recorded in May and June. The selling price index declined due to competitive pricing while the input price index virtually remained unchanged at 64.
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