Pretoria: Trade conditions improved in January 2013 following a decline in December of the previous year, said the South African Chamber of Commerce and Industry (SACCI) on Wednesday. “The volatile trade conditions returned to positive territory in January 2013,” said SACCI.
It said the strong improvement seen in trade conditions in November was followed by a dramatic 15 index points decline to 42 in December, with a recovery of 52 index points in January. The seasonally adjusted Trade Activity Index (TAI) decreased to 44 in December 2012 from 53 in November. It recovered to 54 in January — four index points higher than in January 2012. The improvement in the TAI in January was on the back of business-to-business trade that normalised following the holiday season.
Trade prospects [Trade Expectations Index] for the next six months improved further from 62 in January 2012 and 60 in December 2012 to 65 in January 2013. The seasonally adjusted TEI improved from 59 in December to 63 in January.
All sub-components of trade activity shed the pessimism of December 2012 and were positive. Although present and expected conditions are usually positive in January, improved new orders stand out as an indication that the positive outlook for the next six months may realise.
In January, sales and input prices increased further with the sales price index increasing from 59 to 64 and the input price index rising from 68 to 71.
Higher than expected prices raised a concern about possible higher inflationary expectations, with both the sales and input price indices well in the 70s.
“The greater than inflation increases in labour costs, expected higher electricity tariffs and the impact of the weaker rand on imported inputs like fuel, substantially increase the prospects of greater price instability,” noted Sacci.
The index on expected sales prices rose by a further index point to 73 while the index on expected input prices is 13 points up on the July 2012 level of 66.
Employment in the trade environment remained unchanged in January 2013, with the index in negative territory at 49. The index on employment prospects (employment expectations index) for the next six months increased to 56 from 53 in December 2012.