South Africa’s business confidence inched up slightly in September on firmer equities and precious metals but a lull in exports and subdued manafacturing output were a concern, the South African Chamber of Business (Sacob) said on Thursday.
The Sacob Business Confidence Index (BCI) was at 98,7 after dipping to 98,1 in August, its lowest level to date this year under the weight of global market upheaval.
South Africa had benefited from interventions by central banks to bring calm to global markets hit by a crisis with its origins in the United States subprime sector.
September’s recovery in the BCI was, however, not as broad-based as the previous month’s decline, Sacob said.
”Sacob is concerned that the effects of robust economic practices and even injudicious lending applications in major economies over the last couple of years are now becoming evident,” it said in a statement.
The lull in export volume growth and the subdued output of the manufacturing sector were also a cause for concern to the business body.
Latest official data shows that growth in South Africa’s second biggest manufacturing sector fell to an annualised 0,5% in the second quarter of 2007, its slowest rate in over three years, from 4,7% in the first.
Large deficits on South Africa’s trade account during the last few months could result in a current-account deficit close to 7% of gross domestic product and result in structural economic difficulties, Sacob added.
”Business confidence … may continue to moderate as especially the cyclical impact on expenditure aggregates restrain business expectations,” it said. — Reuters