SACCI Press Release
Embargo: 11:30 on 12 May 2016
Higher Price Expectations
SACCI’s Trade Conditions Survey showed that since May 2015 circumstances remained uncertain and were still in negative territory in April 2016. The seasonally adjusted (SA) composite Trade Activity Index (TAI) nonetheless recovered from the low 39 in December 2016 and registered 47 in April 2016 – slightly better than the 45 in March 2016. The TAI SA was 3 points lower in April 2016 than the 50 of April 2015. Respondents alluded to the subdued macro-economic performance, unaccountability, seasonal factors, drought and shrinking margins as prominent issues contributing to tentativeness in the sector.
The non-seasonally adjusted TAI decreased from 48 to 47 with new orders notably declining significantly by 8 index points. The sales volumes sub-index remained unchanged at 51 in April 2016 while the inventories index increased from 46 to 50. Supplier deliveries stayed at 44.
There was a further increase in price sub-indices with the sales price sub-index increasing by 3 points to 71 while the input cost sub-index rose by 1 point to a new high level of 85 in April 2016. The input cost and the sales price indices were respectively 16 and 9 points higher than in April 2015. Expectations for sales prices over the next 6 months accelerated by 6 points to 79 and the input cost expectations index rose by 4 points to 85.
Trade expectations remain challenging and suggest that the current circumstances affecting trade conditions will continue into the foreseeable future. The seasonally adjusted Trade Expectations Index (TEI) improved to 49 in April 2016 from 45 in March. Although all trade components are expected to improve into positive territory, employment prospects also improved but remained in negative territory. The possibility of further increases in interest rates, higher electricity costs, uncertainty on the volatile rand exchange rate and the sluggish domestic and world economy continue to weigh on trade conditions.
The employment situation in the trade sector showed some encouraging signs by improving by a further 2 points in April 2016 to 50 while the prospects for employment in the sector lifted as the sub-index rose to 46 from 40 in March 2016.
Released by the South African Chamber of Commerce and Industry at the SACCI offices in Rosebank, Johannesburg
For more information, see the SACCI website, www.sacci.org.za or contact:
SACCI CEO Cell: 082 551 1159
Economist for SACCI Cell: 082 822 5566