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Trade conditions remained positive in April 2012 despite the decline in the seasonally adjusted Trade Activity Index (TAI). The seasonally adjusted TAI lost 8 points to measure 51 in April 2012. Despite the fact that the non-seasonally adjusted TAI decreased by 12 points from March 2012 to 48 in April 2012, it is at a higher level than a year ago when the TAI stood at 45.
Sales and new orders both weakened significantly to 50 from strong levels of 66 and 63 respectively in March 2012. In April 2011 the sales volume index was at 46 and the new orders index stood at 45. The inventories index declined notably to 47 from 59 in March 2012 following strong inventory build-ups in both February and March 2012. Supplier deliveries decreased by 9 index points. The fewer trading days in April played a significant role in weaker trade activity in April 2012 compared to March.
The indices for sales and input prices remained virtually unchanged at 63 and 72 in April 2012 and confirm that price pressures remain high. The increase in administered prices by more than 11% (on average) is worrying, while looming demands for increases in the wage rate that are much higher than the inflation rate is cause for concern.
Trade expectations kept to the high levels recorded since the beginning of the year and, in April 2012, the TEI (Trade Expectations Index) was at 64, only three points lower than in March 2012, but two points higher than in January 2012. The accommodating financial environment remains conducive to a positive trade outlook with credit extended to businesses increasing by nearly 12% year-on-year in March 2012 (latest figure).
The six month outlook for key components of trade activity contracted somewhat in April 2012 and sales and input price expectations remained high at 68 and 75 compared to 69 and 75 respectively in March 2012. Expected inventories and supplier deliveries fell but remained in positive territory.
The employment conditions in the trade environment dipped markedly during April 2012 as the index moved back into negative territory from 53 to 43. Expectations on employment conditions remained positive at 55 – up from 54 in March 2012 and 52 in April 2011.