FRIDAY, 10.30AM
BUSINESS confidence took a knock in May following the slowdown in gross domestic product growth in the first quarter. The SA Chamber of Business business confidence index fell 0,2 percentage points to 113,8 last month, its first drop following four consecutive months of increases.
Sacob economic policy director Ben van Rensburg said Sacob is nonetheless confident that the economy will avoid a recession this year, and that a soft landing on a 2,5% growth rate is likely. He said although the economy experienced negative growth in the first quarter over the last quarter of 1996, GDP growth will stand at 2,4% when compared to the same period last year. Manufacturing output growth of 3,6% reinforced optimism that a recession can be avoided.
“The strong performance in the first quarter suggests the manufacturing sector will be the mainstay of growth in 1997, although the strength of the rand may erode export competitiveness in the months to come,” said Van Rensburg.