Trade expectations maintained in December

In its December Trade Conditions Survey, current trade conditions as reflected by the Trade Activity Index (TAI) dipped into negative territory in December to 44 from 57 in November 2010.

SACCI said although last month's dip was a normal seasonal occurrence, the TAI declined by 13 points between November and December compared to nine points in 2009. However, in December 2010 the TAI was two points above the December 2009 TAI.

"The improvement in trade conditions established since September 2010 is likely to continue following the resumption of trade activities post the festive season break," said the chamber.

Typically slow December

In December 2010, improved levels of the sales volumes index (since September 2010) were severely disrupted, with the index dipping 16 points to 47.

"As intermediary business trade typically slows down in December, the decline does not reflect a permanent setback. In 2009, sales volumes slowed down by 14 points. The other components of the TAI also revealed comparable declines."

Meanwhile, the Trade Expectations Index (TEI) continued to improve, measuring 62 in December after it measured 58 in November 2010. It averaged 61 in the past five months.

Price indices for expected and current sales as well as input prices remained virtually unchanged and did not alter the inflationary outlook of subdued price changes. The input price expectations index rose by a point in December after rising by four points in November 2010, signalling potential inflationary pressures around the middle of 2011.

The index on employment conditions in the trade environment contracted to 44 from 48 in November 2010 and remains in negative territory. The employment prospects index registered 52, moving into positive territory in December 2010. This after it has been in negative territory since September 2010.