South Africa’s Business Confidence Index (BCI), as measured by the Bureau for Economic Research (BER) and Rand Merchant Bank (RMB), slipped two index points to 49 in the first quarter of the year, revealing mixed perceptions of the current business environment by those in the building, manufacturing, retail, wholesale and motor trade sectors.
BNP Paribas economist Jeffrey Schultz ascribed the deterioration in confidence to the production-led sectors of building – which slipped from 66 points in the prior quarter to 49 points in the first three months of the year – as well as manufacturing, which declined from 42 to 30 points over the same period.
“A petering out of residential building activity, along with lower momentum growth in the manufacturing sector’s domestic order book, were largely to blame here,” he commented.
“The index essentially remaining flat in the first quarter doesn’t necessarily mean that things have been static below the surface. In fact, the latest survey results show quite the opposite, as in recent months, there have been clear winners and losers from the current happenings in the economy.
“While confidence is still in net negative territory, at below 50 points, it’s the highest it has been since the second quarter of 2013,” Le Roux noted.
“With business confidence continuing to hover around broadly neutral levels, we see little scope for a large improvement in private fixed investment growth this year,” he said.
