SA's business confidence drops

Business confidence dropped last month to its lowest level since May 2010, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.

Its business confidence index (BCI) dipped to 97.1 in January 2012.

“This is the lowest level since May 2010, when the BCI registered 96.7 and set off on an upward trend to peak at 104.2 in March 2011,” the chamber said.

“The decline of the BCI between December 2011 and January 2012 was disheartening, with six of the sub-indices being negative in January 2012, compared to only three sub-indices being down in December 2011.”

Sacci said the economy may experience more difficult times ahead as the low growth scenario in 2012 would impact negatively on economic activity.

“The decline in the Sacci BCI in January 2012, after a promising uptick in December 2011, is an indication of the economic uncertainty under which business has to operate at present,” it said.

Several international and local commentators were cautious on economic prospects for 2012.

The unresolved debt exposure in Europe also cast a negative cloud on the global economy while rating agencies remained sensitive to public debt management and economic growth imbalances.

“Lower economic growth, unemployment, higher inflation, weak municipal service delivery, public administration defaults, and unsustainable social demands are issues in South Africa that cloud the economic and business outlook for 2012,” Sacci said.

“Addressing and managing these issues will have a profound effect on the business environment and business mood in 2012.”—Sapa

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