SARAH BULLEN, Johannesburg | Tuesday 11.30am.
BUSINESS confidence rose above general economic uncertainty to remain unchanged in October, the South African Chamber of Commerce said on Monday. Sacob’s October Business Confidence Index (BCI) remained unchanged in October, with six of the sub-indices which make up the BCI deteriorating and seven improving.
Sacob said that, despite some stabilisation in key indicators making up its index, no growth in retail sales point to a more subdued Christmas period. It mentions, however, that the survey was conducted over period of high interest rates, and conditions could pick up with the lowering of rates.
“Despite these relatively negative trends, there are signs of stabilisation in many of the key market indicators such as the exchange rate of the rand, the level of interest rates, and share prices. If such “stability” can be sustained over the next few months it will provide an important base from which to rebuild business confidence in 1999,” Sacob said. It warns, however, that it will still take some time before the impact of the external shocks of recent market turmoil are fully absorbed by the real economy.
There are some indications, however, that South Africa may have been successful in persuading global investors that it is different from other emerging markets. This could stand the country in good stead in eventual recovery period, Sacob predicts.