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Trade conditions subdued with 'low prospects' for next 6 months - index

Dec 13 2018 08:31

Trade activity in South Africa has remained subdued and the prospects for six months from now are seen as lower than present conditions, the SA Chamber of Commerce and Industry (Sacci) said on Wednesday.

This was indicated by respondents to Sacci's November 2018 trade conditions survey.

The survey showed that trade conditions remained in negative territory with the seasonally adjusted Trade Activity Index (TAI) recording 40 for November 2018 – unchanged from October 2018.

In November 2018 the non-seasonally adjusted TAI improved marginally to 43 from 42 in October 2018, but below the 45 of November 2017.

"Expectations for the next six months suggest that trade expectations will remain negative as the Trade Expectations Index (TEI) remained on 44 in November 2018. The TEI was 11 points below the November 2017 level of 55," Sacci said in a statement.  

Trade conditions were also affected by non-trade matters as identified by respondents. The minimum wage that will affect staff replacements; disruptions by political posturing; volatility ascribed to seasonal factors; compliance costs of the regulatory environment; a lack of service delivery by local government; and uncertainty on the land issue added to the disruption of trade activity, according to respondents.

The sales sub-index remained nearly unchanged at 46 compared to 45 in October 2018, but lower than the 49 in November 2017. New orders also improved on October as the sub-index increased by 3 index-points to 39.

Sales prospects for the next six months moved into positive terrain at 52 from 50 in October 2018. The sub-index for expected new orders declined slightly from 47 in October to 44 in November 2018.

The survey suggests lower sales and input prices going forward, while sales prices remain sensitive to input costs. The sales-price index decreased by 4 index points to 57, and the input-price index by decreased by 8 index points to 74. Future price movements, therefore, point to lower inflationary expectations, according to Sacci.  

The employment sub-index at 38 was relatively stable below the negative level of 40. The six-month employment-outlook index, however, improved marginally by 2 index points to 37.

sacci  |  trade  |  sa economy
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