Business confidence down in May

Business confidence dipped in May to its lowest levels this year, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.

“The index registered its lowest level since July 2010 and the lowest level so far in 2011, but managed to remain 3.8 points above May 2010,” Sacci said in a statement.

The Sacci Business Confidence Index (BCI) was 85.8 in May 2011, down 1.1 points from April’s 86.9. It was 88.3 in March.

“The previously-anticipated upward momentum has failed to gain a foothold and now the BCI faces the prospect of a downward trend.”

Sacci said there was a deterioration in confidence in May in a majority of the sub-indices.

Confidence was down in export volumes, import volumes, new vehicle sales, retail sales, the rand exchange rate, share prices and inflation.

Seven sub-indices were negative and six were positive.

Sacci said two events in May—the approval of the Walmart-Massmart transaction and the outcome of the local government elections—would have significant consequences for the perceived ease of doing business and business confidence levels in the country.

“Given our need for foreign investment, Sacci welcomes the acceptance of the transaction albeit with preconditions.”

it said it was in full support of the prominence of service delivery in the local elections.

“Sacci will closely monitor progress as service delivery to business is an important contributor to business confidence.”—Sapa

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