Though manufacturers are still looking on the bright side, overall business confidence in South Africa is at its lowest in two years, according to the latest Rand Merchant Bank/Bureau for Economic Research (RMB/BER) index.
The index, released on Wednesday, showed a decline from 83 points late last year to 81 in the first quarter of 2007.
”Although the decline of two index points is small and business confidence is still high, at 81 the business confidence index is now at its lowest level in two years,” RMB chief economist Rudolf Gouws said in a statement.
”Also, it is the first time since 2003 that confidence has eased for two consecutive quarters.”
The RMB/BER index is the average of building-contractor, manufacturer, retailer, wholesaler and new-vehicle dealer confidence, covering about 45% of total economic activity.
The two index-point decline was the result of lower retailer and wholesaler confidence.
However, the confidence of manufacturers and new-vehicle dealers had risen slightly.
Manufacturers’ confidence had, in fact, risen to its highest level in over 12 years.
”This is perhaps the most heartening aspect of the overall survey, and bodes well for overall GDP growth prospects this year,” Gouws said.
”Manufacturers are benefiting from strong domestic demand, as well as the lower level of the rand.” — Sapa