Trade conditions remain strong – Sacci

With general business confidence at its highest level in two-and-a-half years, trade expectations have maintained an improved level going into this year, the South Africa Chamber of Commerce and Industry (Sacci) said on Tuesday.

The seasonally-adjusted Trade Expectations Index (TEI) for January measured 58, compared with 59 in November and 60 in December, while the seasonally adjusted Trade Activity Index (TAI), which measures present trade conditions, increased from 41 in November to 48 in December and to 51 in January.

Both the TAI and TEI for January 2018 were at similar levels to that of January 2017.

Sacci reported that a marginal increase in sales volumes was experienced in January, with the subindex rising from 41 to 43, while the new orders index remained unchanged at 40.

The sales price index remained at about 50, while the input price index slowed by three points to 65. Price expectations remained at high levels of 72 and 73 for sales prices and input prices respectively.

The employment subindex increased by two index points to 46 in January and Sacci noted that the employment outlook index for the next six months was positive at 55 in January.

Meanwhile, further improvements in trade conditions have been impacted on by some restraints on trade, including slow economic growth, tight income situations, as well as the high real cost of finance.

Respondents to the Trade Conditions Survey indicated that the strengthening of the rand had resulted in lower rand income for export-based businesses; less discretionary spending by consumers; and economic uncertainty that affected medium-term business commitments.

Notwithstanding these constraints, Sacci point to a generally more “positive business mood” going into this year.