Trade conditions dipped into negative territory in June, according to the results of the monthly SA Chamber of Commerce and Industry (Sacci) Trade Conditions Survey.
Sacci's Trade Activity Index (TAI) measured a seasonally adjusted 47 in June after a reading of 50 in May.
After achieving a seasonally adjusted level of 55 in February, the Trade Activity Index had vacillated between positive and negative territory, Sacci said.
In June last year the index stood at a seasonally adjusted 49.
On an unadjusted basis, the index has been in negative territory since March. It dropped further into negative territory after losing three points from May to June to a level of 46. The sales volumes index declined to 50 following May's level of 56.
All the other components of trade activity except employment had contracted in June, Sacci said.
This followed on the recovery in May after the adverse trading day effect in April due to the numerous public holidays. The input price index declined further by one point, making it 11 points lower than in March. Sales prices also declined by five index points to 56 from the higher 61 of March and April.
The index on employment conditions in the trade environment stood at 48 in June, up from 45 in April and 47 in May. The employment prospects index registered 50 in June and moved out of negative territory from 49 in May.
“While performance in the trade environment is not conducive to higher levels of employment, the current behaviour by labour in the business environment is likely to severely dampen employment prospects further,” Sacci added.
Expectations in the trade environment deteriorated substantially in June, but remained in positive territory.
The Trade Expectations Index registered 56, five points below the May level. The index was continuing its declining trend from the 65 in February.
Expectations on all elements of the trade survey, except employment, deteriorated in June, Sacci noted.
The sales expectations index declined by seven points to 65, while the expected new orders index dropped by nine points. The expected supplies index decreased to 52 and fell to its lowest level in 2011, indicating possible tight supply conditions.
The index on expected inventories also marked its lowest level of 47 in June - it was at 60 in January.
The expected sales and inputs price indices increased by one and four points respectively to 64 and 72 in June.
Rising costs were mainly accountable for the input price rise as fuel and other utility services costs were rising at rates 20 percentage points above consumer inflation, thus putting trade margins under severe pressure.
Claims for wage and salary increases were well above general inflation and were also seriously affecting the ease of doing business in the trading environment, Sacci concluded. - I-Net Bridge