January shows modest rise in business confidence

06 February 2015

In its slowest start to the year since 1997, the South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) rose by one index point to 89.3 in January, reflecting a still-subdued business mood.

Describing business confidence as “muddling on”, Sacci economic consultant Richard Downing said on Thursday that, as suggested by the return to below-90 levels in December and January, the improvement in November’s BCI of 90.8 appeared to have been a random increase.

“The potential for serious disruptions of the economy and business are already present and will not only restrain economic activity, but may set the economy on an indifferent course in 2015,” he told a media briefing.

The below-par business sentiment was spread across activities, Downing found, with seven of the thirteen subindices negative year-on-year.

Manufacturing, imports, vehicle sales, building construction, and real private-sector borrowing were the only subindices to improve year-on-year.

He outlined a number of major developments that could be crucial to the economic and business climate this year, while, domestically, there were continuing high-risk disruptions to the economy and businesses.

These included electricity shortages, business lootings, high-profile business crimes and robberies, political and social intolerance and public sector inefficiencies.

“It is, therefore, of the utmost importance that the upcoming budget give a reassurance of a consistent and business enhancing policy framework,” he commented.

By: Natalie Greve

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