Trade Conditions Remain Brittle
SACCI today released the results of the SACCI Trade Conditions Survey for March 2008.
The Trade Activity Index (TAI) which measures the latest monthly trade conditions, after recovering to 50 in February 2008, dropped back to 45 in March 2008.This latest survey results suggest that trade conditions remain brittle notwithstanding the recovery in January and February 2008 from 44 in December 2007.
The sub-index on current sales volumes declined to 44 in March 2008 after improving from an exceptionally low of 41 in December 2007 to 47 in January 2008 and 55 in February 2008. The new orders sub-index also dipped substantially to 43 in March 2008 after measuring 52 in February 2008.
After the Trade Expectations Index (TEI) recovered to 58 in February 2008, it declined to 52 in March 2008. This is the lowest level since November 2003 when the TEI also measured 52 points. The low TEI follow on the 54 in January 2008 and 58 in February 2008. It is evident that trade conditions remains unstable and uncertain and that tighter financial conditions could further worsen trade prospects.
The sub-index on sales expectations declined to 54 from 64 in February 2008 – the worse level since the survey started in August 2001, while the index on expected new orders declined by 8 points to 52 in March 2008.
Inflationary pressures remain and even appear to be increasing. The index on selling prices rose by a further index point to 75 in March 2008 - not less than 15 points above the December 2007 index level. This is the highest level for the index since the 77 of April 2002. The input price index, after also rising in March 2008, is now 17 points higher than the 67 in December 2007. December 2007 was the last month in which the price indices declined. Faster rising prices remain a strong possibility over the next six months (survey period).
The employment level index dipped by two index points to 47 in March 2008 while employment prospects in the trade environment remained in negative territory in March 2008 as the index declined from 49 to 48.
