South Africa’s Business Confidence Index (BCI) dropped to 94,8 in December 2007 after the BCI declined to 95,8 in November 2007, the South African Chamber of Commerce and Industry said on Wednesday.
The December 2007 figure is the lowest BCI level since November 2003 and a new low for 2007.
Of the BCI’s sub-indices, trade, residential construction and import volumes ”declined substantially”, inflation moved higher while the stock market lacked direction, according to a statement issued by the chamber.
On the positive side precious metal prices and a more stable rand assisted exports and manufacturing output, while real financing costs and real borrowing remained stable.
Issues expected to impact on an already-nervous environment in 2008 would include inflationary expectations, slower growth, the current account deficit, infrastructure bottlenecks, a rampant investment demand cycle and crime.
The change in the African National Congress’s leadership and possible policy adjustments could also have important economic consequences and affect business confidence.
”SACCI foresees that 2008 will be economically more difficult than 2007, with corrections and policy adjustments that will have to take care of a tightening economic situation.”
The BCI was likely to ”continue to moderate” in 2008, the chamber predicted.
The BCI declined to 95,8 in November 2007. In 2007 the BCI average was 99,8. In 2006 it was 100,8.
The 2007 average was the lowest annual figure since 2004, when the BCI averaged at 97,8. – Sapa