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Trade conditions remained in positive territory for the first five months of 2013, with the Trade Activity Index (TAI) measuring 56 in May 2013. According to Sacci (SA Chamber of Commerce & Industry), the trade sector appears to be doing better than the broader economy.

The strong improvement in trade conditions in April failed to sustain itself in May, and could be further hampered by tighter retail trade conditions and exports being under pressure.
The decline in the TAI by five points between April and May 2013, following the five point surge between March and April 2013, confirms the volatility in trade conditions under the present uncertain economic circumstances.

The seasonally adjusted TAI dipped by eight points to 57 after improving by 11 index points in April 2013. With economic growth declining to below 2% year-on-year, trade conditions are likely to come under strain for the rest of 2013.

Sales volumes and new orders also reversed their gains of 10 and eight index points in April 2013. Supplier deliveries and backlogs on orders, however, slowed slightly in May 2013 with inventory levels increasing due to slowing sales volumes. The pressure on sales prices remained high but stable with the index at 62 in April and May 2013. The sales price index was three points above the 59 of May 2012.

The input prices index at 71 exceeded the sales prices index by nine points in May 2013 indicating relatively high input cost pressures.

Trade prospects (TEI) six months hence (scope of survey) remained positive with the TEI on 61 in May 2013 compared to 64 in April 2013. The seasonally adjusted TEI averaged 62 for the first five months up to May 2013 and is the same average as for the first five months of 2012.

The prospects for sales volumes and new orders slowed somewhat from the beginning of the year but at levels above 60 it should not yet be regarded as altering the current trend. The outlook for input and sales prices eased as the indices decreased in May 2013 by four and five index points respectively – albeit from high levels of 73 and 83 in April 2013.

Employment conditions in the trade environment weakened in May 2013 with the index declining by three points to 49. The index on six month employment prospects also dipped by three points from the previous month to 51 in May 2013.