Business confidence up

The South African Chamber of Commerce and Industry’s (Sacci’s) business confidence index (BCI) rose to its highest level since September 2008 at 88,3 in March, from 86,4 in February, the organisation said on Tuesday.

The 88,3 reading was 5,1 index points higher than in March 2010.

The financial environment remained conducive to a positive business climate in the short term, Sacci reported.

According to Sacci, the domestic economy appeared to have regained some momentum in business confidence but the index remained sensitive to domestic socioeconomic developments.

Threats to the positive outlook in the financial environment were identified as new risks in the global economic environment, commodity price movements and geopolitical instability.

Natural disasters
Sacci warned that, although the improvement in the BCI on a year-on-year basis continued in March, South Africa’s performance in the international trade environment could constrain improvements in business confidence if global competitiveness concerns were not actively addressed.

On natural disasters in the world’s third-largest economy, Japan, Sacci said the consensus appeared to be that longer-term consequences of the disasters for the world economy would be relatively muted.

The business formation did, however, note that the Japanese economy would take some time to recover as infrastructure repairs took place.

The pace of the Japanese recovery would be determined by the pace at which the damaged rail and road networks were repaired and at which corporate operations were restored, Sacci added.

Middle East and North Africa political turmoil was of greater immediate concern according to Sacci, given what the organisation referred to as the current and potential impact on the crude oil price and the consequences for global inflation.—I-Net Bridge

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