7 July 2009
The Business Confidence Index (BCI) for June increased by 1.3 points to 83.1, the South African Chamber of Commerce and Industry (SACCI) announced on Monday.
“There was a swing towards positive territory in June as reflected in the improved BCI level,” SACCI said in a statement on Monday. “The SACCI BCI increased by 1.3 points to 83.1 in June 2009 and is 4.2 points higher than the low of 78.9 recorded in March 2009.”
According to SACCI, the latest economic data and financial market movements indicate that business is stabilising in South Africa, although companies and consumers remain hesitant.
“Although still broadly depressed, a number of economic indicators suggest that the decline of the economy has bottomed out and that some economic activities may even have turned. However, the pace of recovery remains tentative and still fragile,” it said.
The slowdown of imported merchandise and the increase in the volumes of merchandise exported between January and May this year suggests lessening pressure on the country’s current account deficit.
“Notwithstanding the positive trend since the beginning of the year, export volumes are still about 30% down on the high export levels reached in September [and] October 2008,” SACCI said.
It added that the National Regulator of South Africa’s decision to grant Eskom a tariff increment would “no doubt contribute to higher inflationary expectations and risks”.
“Domestic and foreign demand for South African goods and services is strained, and this has negative consequences for the supply side factors of production, namely labour, capital and operating overheads,” SACCI said.
Caution and restraint were required in charting an economic policy path through the economic woes that threaten South Africa, the organisation said.
“The fragility that underpins the promise of stability makes it vulnerable to suffocation if not supported by the appropriate economic policies.”