Trade conditions remained in positive territory in June although international and retail trade are tightening, the South African Chamber of Commerce and Industry (Sacci) said.
Trade conditions (TAI) came off a recent high in April 2013 of 61 – to 56 in May 2013 – and consolidated at 55 in June 2013.
A positive trend in trade conditions can be observed since October 2013 although it is characterised by volatility.
The seasonally adjusted TAI dipped by 1 point to 56 after declining by 8 index points in May 2013.
“With households under pressure from high debt levels and associated debt service costs, rising prices and with global economic growth under strain, trade conditions are likely to tighten somewhat in the second half of 2013. The TAI nevertheless measured 55 on average in the first half of 2013 compared to 53 on average in the first half of 2012,” said Sacci on Thursday.
Between May and June this year, sales volumes and inventories were the only trade components that declined while the other elements of trade remained virtually unchanged.
Backlogs on orders, however, increased from 44 to 50 in June. The pressure from input costs on sales prices remained high with a 7 points differential between the sales price index of 64 in June 2013 and the input prices index of 71.
Respondents to the trade survey are optimistic about prospects for the next six months; this despite economic indications of a tighter trade environment later in the year.
The seasonally adjusted TEI averaged 63 for the first half of 2013 – the same as for the first half of 2012.
The prospects for sales volumes, new orders, inventories and supplies remained well in positive territory. The pressure on input and sales prices will remain high with 78 and 67% of respondents respectively expecting rising prices in the second half of 2013.
Employment conditions in the trade environment remained on the margin in June 2013 with the index at 50. The six month employment prospects index improved to 54 in June from 51 in May 2013 signalling greater employment creation prospects in this sector just before year-end. – SAnews.gov.za
Alan Straton
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