Trade activity on the rise since December

Zweli Mokgata

Zweli Mokgata

Trade activity has been on the rise for the past three months despite the fall in business confidence this week.

The South African Chamber of Commerce and Industry's (Sacci) Trade Activity Index has been steadily climbing since December last year.

In December the index stood in negative territory at 44 (out of 100), and climbed to 48 in January and now has come to the break even level of 50 in February. The index rates company's business activity measured based on sales, inventory levels, prices and a range of other indicators.

Richard Downing, Sacci chief economist, said: "We are coming from a very high base and while trade activity is improving, it is still on a downward trend."

In November last year the overall trade activity index was at a relatively high level of 58 and December 2006 recorded a healthy index of 60 compared to last year's 44.

Downing said: "We come from very high levels, which were not normal or sustainable. The index fell substantially last year, and what we are seeing is the economy coming down to reality.

"The index is recovering, but not to the levels we saw in 2006 and early last year."

The current sales volume index strengthened significantly over three months from 41 in December to 47 in January and 55 in January.

The Trade Expectations Index has remained steady at 58 in February after sliding from 57 last December to 54 in January this year.

The Rand Merchant Bank and Bureau of Economic Research Business Confidence Index slid to its worst levels since 2000, but the study was based on sentiment and not statistics.