Trade conditions remained in negative territory and under pressure in June with the seasonally adjusted composite Trade Activity Index (TAI) measuring 46 – down from 48 in May, the South African Chamber of Commerce and Industry (Sacci) reports.

Owing to the difficult domestic and global economic environment, trade conditions contracted and were only slightly affected by seasonal factors in May and June.

The nonseasonally adjusted TAI declined to 45 in June from 49 in May.

The sales volumes subindex decreased to 50, compared with 52 in May, while new orders were notably lower, with the subindex decreasing to 40 from 49 in May.

Estimates also indicated that export and retail trade volumes remained under pressure owing to trading partners experiencing more economic difficulties, while households were under strain from unemployment and high debt levels.

Sacci highlighted that continuing problems with electricity supply restrained trade of consumer goods and services, but that the supplier deliveries index had improved from 45 to 46 in June, with supplies not a serious limiting factor to trade.

The inventories index declined by seven index points to 47 in June.

Sales and input prices eased by three and five index points to 56 and 60 respectively.

The weak rand against major trading currencies continued to be a concern for importers.

Although the National Energy Regulator of South Africa had not approved the 25% increase in electricity tariffs sought by State-owned enterprise Eskom, the 12% increase that had previously been approved would affect business costs and returns, said Sacci.

Price expectations also eased somewhat, as the sales and input cost indices decreased but remained high at 67 and 70.

In contrast to softer present trade conditions, the seasonally adjusted TEI remained unchanged and in positive territory at 58.  Sales expectations increased by six points to 68 in June.

The employment index remained negative at 42, compared with 46 in May. The six-month employment prospects index was stable at 47.