Business confidence improves

8 November 2012

South African business confidence in edged up marginally in October despite an unfavourable economic climate, the SA Chamber of Commerce and Industry (Sacci) said on Wednesday.

Its Business Confidence Index (BCI) for October showed a 0.3 index point increase to 92, from 91.7 in September.

The BCI in October was below its level from the same time last year, but was better than September 2012’s year-on-year performance, which reflected a 6.7 point difference.

The BCI gauges the business community’s mood in response to economic conditions. It uses 13 sub-indices which include manufacturing, exports, imports, vehicle sales, construction, share prices, inflation, and the rand exchange rate.

Sacci said there were improvements in seven of these sub-indices compared to three improvements in September.

Both the financial and real economic sub-indices performed better in October than in the month before.

Four changes were negative on a monthly basis, compared to six in September.

The chamber said business had been broadly satisfied with the Medium-Term Budget Policy Statement (MTBPS) presented by Finance Minister Pravin Gordhan at the end of last month.

“To enhance business confidence, it is cardinal that delivery on the MTBPS framework prioritises those aspects which are key to economic growth.”

Sacci said that despite the MTBPS, the outlook for the economy remained uncertain and would respond to critical policy decisions taken by the African National Congress at its leadership conference in December.

It also noted concern about export and import trends.

“The lack of competitiveness with the rest of the world appears to be a mounting problem. Foreign trade plays an important part in the business mood and reflects the openness of the SA economy.”