To enjoy the full Mail & Guardian online experience: please upgrade your browser
04 Feb 2014 14:07
The weak domestic economic situation that held risks for South Africa's credit and sovereign ratings in connection with developments in the global financial markets, created an environment of uncertainty for business. (Gallo)
The South African Chamber of Commerce and Industry's (Sacci) business confidence index (BCI) dropped to its lowest level in five months in January.
It fell from 91.9% in December 2013 to 90.5 in January, Sacci said in a statement on Tuesday.
Between December 2013 and January 2014, five sub-indices turned positive, three remained roughly unchanged, and five were negative. However, the BCI was negatively biased given the extent of adverse performance in some of the indices.
"This is the lowest reading for the BCI since August 2013 and compares poorly to the level of 100 for the 2010 base year and the 100.7 for the BCI at the trough of the current business cycle in September 2009."
The BCI was 3.5 index points below the January 2013 level.
If the BCI could build on the level of 91.9 in December 2013, it would have been a positive start to business confidence in 2014.
January saw a conversion of economic ills in some important sub-indices reflecting the business climate.
The weak domestic economic situation that held risks for South Africa's credit and sovereign ratings in connection with developments in the global financial markets, created an environment of uncertainty for business.
The reaction of the South African Reserve Bank at its latest monetary policy committee (MPC) meeting, where it raised the repo rate from five to 5.5%, stood as a cautionary note in the wake of these developments.
Although five sub-indices pushed up the BCI in January 2014 and three sub-indices of the BCI did not change meaningfully between December 2013 and January 2014, the extent of the negative impact of five sub-indices caused the BCI to decline in January 2014.
Three of the seven sub-indices on real activity were positive on a month-on-month (m/m) basis and two of the six financial sub-indices were positive and one neutral.
It is concerning that on a year-on-year (y/y) basis, only two sub-indices made positive contributions to the BCI, 10 had a negative impact and one was neutral, it said.
A major activity like exports continued to improve on a y/y basis, while municipal services made a minor contribution to the January 2014 BCI. – Sapa
Create Account | Lost Your Password?