CIPS News


Trade Conditions Remain Weak

CIPS 12 October 2011

Trade Conditions Remain Weak

The results of the monthly SACCI Trade Conditions Survey for September 2011 indicate that overall trade conditions remained weak and have been in negative territory since April 2011.  The Trade Activity Index (TAI), that reflects present trade conditions, deteriorated to a seasonally adjusted 45 from 48 in August 2011.  The TAI average of 47.8 for the first nine months of 2011 is 1.6 index points lower than the average of 49.4 for the first nine months of 2010.

The sales volumes index at 49 fell into negative territory after recovering to 53 in August 2011.  The other components of trade activity were virtually unchanged although the employment index improved by 2 points to 47.

Expectations in the trade environment slipped marginally as the TEI (Trade Expectations Index) declined to 55 from 57 in August 2011.  The outlook for sales, new orders and supplies for the next six months are slightly lower.  Employment prospects remained unchanged at 49.  Supplies are expected to become tighter as the index dipped by 3 points to 52 in September 2011

Pressure on sales and input prices are expected to increase in the coming months.  Although current sales prices were unchanged at 56, input prices increased by 4 index points to 67 from August to September.  The six month outlook for sales prices has increased from 62 in July 2011 to 68 in September 2011.  Input price expectations increased by 7 points from July to 73 in September 2011.  Inflationary pressures are rising and will become more widespread deriving from basic inputs such as fuel and public utility services.  The latest weakening of the rand will also have adverse impacts on cost structures.

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