Trade conditions lose momentum in January

Releasing its Trade Conditions Survey, SACCI said trade conditions reflected by the Trade Activity Index (TAI) was at 49 points, which was below the level of 50 increasing from a seasonal low of 44 in December 2010.

"In January 2011, the TAI was five points above the January 2010 level. The path to improvement in trade conditions, which started in September 2010, has lost momentum," said SACCI.

Although the improved level of sales volumes index (since September last year) was severely disrupted in December last year, it recovered slightly in January to 50. This was four points above the January 2010 level.

"As intermediary business trade is usually slow to pick up pace in the beginning of the year, trade conditions stand to improve if expectations for the months ahead are realised. The other components of trade activity all improved on the December levels, but remained below the stronger November 2010 levels," said SACCI.

In January, the Trade Expectations Index (TEI) continued to improve, measuring 64 points after measuring 62 in December 2010. Sales volumes, new orders, supplier deliveries and inventories expectation indices came in slightly higher than in December 2010.

The price indices for current sales and input prices increased substantially in January 2011 and deviated from the outlook of subdued price changes of the previous nine months.

The input price index rose by seven points in January 2011 after a one point increase in December 2010. The sales price index rose by five points. The price expectations indices, however, remained stable and suggest that upward price pressures are expected to remain.

The index on employment conditions in the trade industry improvement to 47 in January, from 44 in December, even though it remained in negative territory.

"The employment prospects index registered 51, remaining in positive territory in January 2011 after being in negative territory from September to November 2010," added SACCI.