While trade activity remained in positive territory during March it was still restrained, found the South African Chamber of Commerce and Industry’s (Sacci’s) Trade Conditions Survey, released on Tuesday.

Sacci’s trade activity index (TAI) for March, at a level of 54 index points, stayed the same as that of February; however, it was below the March 2013 level of 56.

Further, the seasonally adjusted TAI declined slightly by one index point to 50 in March 2014 and was down from 52 in March 2013.

“The marginally improved business climate in March 2014 – according to the Sacci business confidence index – helped keep trade conditions in positive territory despite tighter overall financial conditions and the financial stresses experienced by the consumer,” Sacci said.

Loans and advances by monetary institutions to private businesses increased by 12.7% in February and assisted businesses in coping with mounting cost pressures.

Meanwhile, sales volumes increased from 55 in February to 59 in March, while new orders remained at 57.

“Consistency of new orders confirms the relatively positive outlook for trade activity in the next few months,” Sacci said.

Inventory levels remained almost unchanged at 48, with supplies appearing well stocked and did not seem to pose a risk over the next six months.

Further, sales and input price pressures remained high in March at 67 and 80 respectively, which suggested continuing inflationary pressures within the trade environment.

Sacci also pointed out that the rand exchange rate continued to improve in March and alleviated some immediate input cost constraints; however, higher costs as a consequence of the depreciation of the rand would remain in the supply chain over the medium term.

Sales and input price expectations, therefore, remained high with the expectations indices at 73 and 81 in March.

Meanwhile, the seasonally adjusted trade expectations index remained at 58 in March for the third consecutive month, with expectations for the components of trade activity being well into positive territory, therefore, not altering the cautious, but positive, outlook.

Further, current employment conditions deteriorated slightly into negative territory in March as the employment subindex declined from 50 to 49, while the prospects for employment in the trade sector improved slightly as the subindex increased from 52 in February to 54 in March.