SA Trade conditions in positive territory

Trade conditions improved in January 2013 following a decline in
December, said the South African Chamber of Commerce and Industry
(SACCI) on Wednesday.
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 to 52 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.

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