The Business Confidence Index (BCI) declined slightly to 93,4 in April 2008 after measuring 93,9 in March, the South African Chamber of Commerce and Industry (SACCI) said on Wednesday.
Although this was the lowest level so far in 2008, the pace of decline in the BCI appeared to have slowed, the SACCI said.
The BCI has dropped by 8,5 index points, or 8,3%, since April 2007 and the average for the SACCI BCI in the first four months of 2008 was 93,8, compared with the average of 100,9 in the first four months of 2007.
The SACCI BCI appeared to have become ”somewhat sticky” around the level of 94.
”With no clear direction from the global economy, uncertainty surrounding the Zimbabwe outcome as well as lost domestic economic momentum, the BCI tends to reflect strains in the economy and uncertainty on direction,” the SACCI said.
Strong relative price adjustments on a global scale on basic items such as food and crude oil further complicated decision-making by business and exerted increasing pressures.
Global economic uncertainty had been tapered by drastic monetary action taken by the United States to ward off the possibility of a severe recession, the SACCI said.
However, rising food and fuel prices at the moment were ”unfortunate developments.”
South Africa’s own infrastructural and structural shortages were adding to domestic economic woes and uncertainty, which was detrimental for local business confidence, the SACCI said.
Geo-political problems and inconsistent approaches in addressing problems in Southern Africa were further contributing to ”an already nervous business environment”.
Inflation and the balance of payments continued to impose risks and needed continued attention for the preservation of a consistent and accountable economic policy that was conducive to a sound business and investor environment, the SACCI said. — Sapa