National economy stabilises

2013-07-12 00:00

TRADE conditions remained positive in June although international and retail trade are tightening, the South African Chamber of Commerce and Industry said yesterday.

Sacci’s non-seasonally adjusted trade activity index (TAI) dipped slightly from 56 in May to 55 in June.

The TAI, with seasonal adjustments, dipped one point to 56 in June, after declining by eight points in May, said Sacci economist Richard Downing.

Meanwhile, BankservAfrica’s Economic Transaction Index (Beti) shows encouraging signs that the economy is stabilising, the electronic payment transaction company said yesterday.

BankservAfrica’s regulated products CEO, Brad Gillis, said the value of Beti transactions in the past 12 months totalled R7,7 trillion, a 6,3% increase on the previous 12 months.

The economy seemed to be growing at a normal pace every two months and at a stagnation rate in the alternating months.

“With households under pressure from high debt levels and associated debt-service costs, and rising prices ,and with global economic growth under strain, trade conditions are likely to tighten somewhat in the second half of 2013,” said Downing.

Two sub-components of trade activity in the Sacci index, sales volumes and inventories, fell between May and June this year.

All the other components remained almost unchanged. Backlogs on orders increased from 44 to 50 in June.

Browning said 78% and 68% of respondents respectively expected input and sales prices to increase in the second half of the year.

“The pressure from input costs on sales prices remained high, with a seven-point differential between the sales price index of 64 in June 2013, and the input prices index of 71,” he said.

The six-month trade expectations index (TEI) averaged 63, the same as for the first half of last year.

Browning said the prospects for sales volumes, new orders, inventories and supplies remained well inside positive territory.

Employment conditions in the trade ­environment remained on the margin in June at 50.

The six-month employment prospects index improved to 54 in June from 51 in May. This signalled greater job-creation prospects in the sector just before year end.

Chief economist for economists.co.za, Mike Schüssler, said a return to “normal” economic growth should be cause for celebration after the recent labour upheavals and rand weakness.

“While the South African economy continues to grow at a slower pace than we want it to, the fact remains that June 2013 was the 46th month of an upswing, making this the second-longest business cycle upswing in the country’s history,” he said.

Schüssler said the Beti did not imply that the country was in a boom phase but rather back to a steady, albeit slow, growth period, with the normal average growth rate pegged at 3,4%. The return to normal growth was further evidenced by the 3,3% increase in new car sales. Ttotal vehicle sales, seasonally adjusted, were up by 4,4% for June.

The Kagiso Purchasing Managers’ Index (PMI) also increased by 1,2 points in June to 51,6.

“Along with the February data, we feel that four of the last six months have shown relatively robust and more normal growth than most of last year,” Schussler said.

“With electricity distribution showing growth for two months in a row in May 2013 after 13 months of decline, it is clear that more than one set of indicators are showing a more positive trend than most of last year.”

— Fin24-Sapa.

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