/ 13 January 2009

SA business confidence slumps

South Africa’s business confidence index (BCI) fell to 83,8 points in December from 86,7 points the previous month, reaching its lowest level for 2008, the South African Chamber of Commerce and Industry (SACCI) said on Tuesday.

SACCI said confidence was likely to remain subdued until international economic conditions improved and the local economy showed signs of recovery.

Constrained household spending and slower economic growth, a large current account deficit and the need for inflows to finance it, as well as falling commodity prices would continue to weigh on sentiment in 2009, it said.

Seven of the 13 sub-indices made positive contributions to the index in December – two sub-indices more than in November 2008. Five sub-indices had a negative impact on the index’s movement and one remained unchanged.

”Threats and actions by labour interests in the present sensitive business climate will be counter-productive, have unintended consequences and harm business confidence.

”Indications are that the global and domestic economies could only start to lift their performance towards the end of 2009. The pace of improvement might be slower than wished for, but could be more solid and sustainable,” SACCI said. — I-Net Bridge, Reuters