/ 12 January 2011

SA business confidence rises in December

Business confidence in SA improved slightly in December but remains vulnerable due to shaky investment and household spending, a survey shows.

Business confidence in South Africa improved slightly in December but remains vulnerable due to shaky investment, household spending and employment, a survey showed on Wednesday.

The business confidence index (BCI) edged up 0,6 points to 87,6 in December from 87 in November, the South African Chamber of Commerce and Industry (Sacci) said in a statement.

“It will be challenging to muster the momentum towards growth while investment and household spending are driven by credit and while employment and fixed investment remain subdued,” the business group said.

South African unemployment is 25,3% of the labour force and households are still highly indebted after borrowing heavily in the run-up to a recession in 2009.

Sacci said business confidence was also likely to be affected by uncertainty over economic policy and disruptions such as strikes.

“There are debates going in terms of nationalisation and education policy that create uncertainty and business confidence doesn’t like that,” Richard Downing, economist at Sacci, told Reuters. — Reuters