The South African Chamber of Business’s (Sacob) business confidence index (BCI) has declined further to 99,1 in June from 100,2 in May and 101,9 in April, Sacob data on Thursday showed.
The index had edged up to 101,9 in April after declining to 99,5 in March, and this came after it had dipped to 101,5 in January after a new record of 103,5 had been set in December last year.
“The BCI appears to be continuing the downward trend since January 2007 despite a slight pick-up in April 2007. Business confidence seems to be going through a mild downward adjustment after the buoyant but relatively stable business mood experienced in 2005 and 2006,” said Sacob.
It observed that the sub-indices used in compiling the BCI were moderating further as all but the construction sub-index continued to dip further below their medium-term trends.
The financial sub-indices of the BCI were also reported to have turned less favourably in June and negatively affected the BCI.
“Foreign merchandise trade with regard to export and import volumes increased according to data released in June and were in support of business confidence,” added Sacob.
Sacob said it was “relieved to notice” that the economic data released in June this year confirmed a moderation, especially in real domestic consumption demand, with signs of monetary policy having greater effect as well as greater responsibility from borrowers.
It concluded that it trusts that this moderation would help to prevent a further tightening of business conditions by policymakers. — I-Net Bridge