Despite lacklustre readings from the South African Chamber of Commerce and Industry business confidence index and the Bureau of Economic Research’s survey of business confidence for the second quarter, Moody’s Analytics believes that South Africa’s recovery is durable and that business confidence is on an upward trajectory.
However, it cautions that the climb will be difficult, adding that wage negotiations and labour strikes could sour the mood in the near term.
“Confidence is volatile and sensitive to social, political and economic events. Domestically, wage negotiations and labour strikes could raise doubts about the business climate. Unrest in the Middle East, Japan’s disaster, and Europe’s sovereign debt drama have also taken a toll on sentiment. Some of these effects will be transitory; others such as Europe’s fiscal crisis could persist,” the analysts say. — I-Net Bridge