The South African Chamber of Business’ (Sacob) Business Confidence Index (BCI) declined marginally from 99,1 in July to 99 in August, Sacob said on Tuesday.
Sacob said although the index declined marginally by 0,1 index point from July to August, the BCI was poised over developing balance of payments constraints and the prospect of remedial policy action, both of which could affect business confidence negatively.
Nonetheless Sacob noted that the BCI has been quite consistent over the past two years as it averaged 100,2 with a standard deviation of only 1,4 index points over the period.
Despite the slight decline that the index reflects since April 2006, business confidence remains strong, although there are economic developments that suggest a tightening of economic conditions associated with a more stringent policy stance in the short to medium term, Sacob said.
Sacob economist Richard Downing noted that indications in the economy, however, suggest that business might find the going less comfortable over the short to medium term as the financial environment and domestic household demand tightens. – I-Net Bridge