Trade conditions have tightened since April, the SA Chamber of Commerce and Industry (Sacci) said on Tuesday.
The chamber's seasonally adjusted Trade Activity Index (TAI) lost four points in July to measure 45, compared to a high of 59 in March.
“In July last year the seasonally adjusted TAI stood at a low of 38 in a period marked by heightened and militant labour action,” it said.
The non-seasonally adjusted TAI dipped to 45 in July 2012, compared to 48 in June.
“Trade conditions are characterised by volatility ranging from optimism to negativity as data reflects an uncertain economic environment - notably with sales and new orders,” the Sacci said.
After recovering strongly to 64 and 58 respectively in May 2012, sales and new orders declined to 51 in June 2012 for each index, and then to 45 each in July 2012.
In March 2012 these indices stood at 66 and 63 respectively.
The inventories index decreased to 45 from 50 in June 2012, while the supplier deliveries index declined to 42 from 44.
“Sales and input prices appear to be picking up as the sales price index rose to 57 from 55 and the input price index increased to 66 from 63 in June 2012,” said the chamber.
“Although price pressures were easing over the last four months, the cost pressures of especially administered prices are coming through, despite weaker trade conditions that make it difficult to pass on rising costs.”
Administered prices rose by an average of 10 percent over the past year.
“Trade expectations (TEI) for six months hence have deteriorated as the expectations are focusing beyond the next festive season.”
However, the TEI increased to 61 in June from 57 in May and tapered off to 54 in July 2012, the lowest level this year.
“The continuing uncertainty and expectations of a low performing economic environment will continue to weigh negatively on the trade outlook in coming months.”
The six month outlook for the key components of trade activity also reflected volatile trade conditions.
After picking up in June, the sales and new order expectations indices decreased to 62 and 57 in July, from 73 and 65 respectively.
“The volatile conditions also led to expected lower inventory holdings.”
Expected supplier deliveries were under pressure and the index moved into negative territory registering 47.
Employment conditions in the trade environment remained virtually unchanged during July 2012 as the index moved from 44 to 45 - still in negative territory.
The employment outlook index remained at 50, which was better than last year's July index of 46 when labour action was endemic, the Sacci said. - Sapa