Business confidence in January dipped further, the South African Chamber of Commerce and Industry (SACCI) said on Thursday.
SACCI’s Business Confidence Index (BCI) for January 2009 measured 82,4 compared with 83,8 points in the previous month.
Only four of the 13 sub-indices made positive contributions to the BCI in January 2009 — compared with seven sub-indices in December 2008.
Seven sub-indices had a negative impact on the BCI’s movement in January and two had no effect.
The SACCI BCI movements during January 2009 continued to reflect uncertain global conditions affecting business confidence and it appeared that the depth of the global financial crisis continued to become more severe than initially anticipated, SACCI said.
”The degree of openness of the South African economy [from a financial and trade perspective] makes it vulnerable to international economic and financial developments.
”The severe decline in the SACCI BCI from October 2008 bears testimony to the impact of global economic conditions.”
In November 2008, the International Monetary Fund (IMF) forecast for global growth was revised to 2% for 2009 and, in January 2009, the IMF cut its forecast for global growth to 0,5% for 2009.
”The frequency of the revisions of the IMF’s growth predictions for 2009 indicate the severity of the global economic slowdown.”
Although the global economic conditions were recessionary in nature, and the intensity of the downturn was difficult to ascertain, domestic economic conditions appeared to be experiencing a relatively subdued impact, SACCI said.
”However, a recovery in local economic activity and business confidence will be indefinitely delayed while global economic uncertainty prevails.”
The Business Confidence Index is generated monthly by SACCI as a measure of the level of business confidence within the South African economy.
It is a market-related index that reflects not what business is saying, but what it is doing and experiencing.
It is therefore not an opinion/perception-based index. — Sapa