Business expectations for the next six months have improved significantly, the South African Chamber of Business (Sacob) said on Thursday.
Expectations on sales, new orders and employment were more positive in December than in November 2005, the business lobby said.
”This suggests that businesses do expect trade activity to improve further on a buoyant 2005,” Sacob economist Richard Downing said.
He said business expected a further improvement on already brisk conditions, which they expected to lead to further job creation.
Business also expected inflationary pressures to rise only slightly and would maintain their present inventory levels while suppliers were expected to step up activity.
But more respondents were seeing sales and input prices rising in the next six months.
”Although fuel prices came down, it continues to have an impact on cost, as for instance the diesel price is still substantially higher in January 2006 than a year ago.”
Meanwhile, trade conditions subsided somewhat in December 2005.
”The index dipped on an exceptional positive November 2005 outlook of 55 index points into negative territory with the Trade Activity Index (TAI) at 49 in December 2005.
”A similar seasonal pattern occurred in 2004 but then the TAI retracted only four index points from the November index compared to six points in 2005,” Downing said. – Sapa