South Africa: Trade Conditions Remain Tight

Although the seasonally adjusted Trade Activity Index (TAI) improved from a low level of 44 in August 2014 to 48 in September, trade conditions remained tight and in negative territory. The September 2014 level is slightly below the TAI of 50 a year ago. Trade conditions are currently challenged to exceed 50. On an unadjusted basis, the TAI improved by 5 index points from 43 in August 2014 to 48 in September.

Uninspiring economic growth of between 1% and 2% for 2014, difficulties in recovering from the labour disruptions, households being financial pressured and export volumes being below par, are the contributors to restrained trade conditions. The sales volumes and new orders sub-indices rebounded, and after being 6 and 5 points down in August respectively, both indices recovered to 47 in September. However, both indices remained in negative territory. Supplies and backlogs on orders both improved, but the inventories index declined by 3 points to 50 in September.

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