Business Confidence Index remains unchanged

Thursday, September 3, 2009

Johannesburg - The Business Confidence Index (BCI) for August remains virtually unchanged, the South African Chamber of Commerce and Industry (SACCI) said on Thursday.

The index, which decreased by 0.2 to 83 points in August, remained virtually unchanged for the third consecutive month.

In July BCI increased by 0.1 point to 83.2. In June it stood at 83.1.

"The August 2009 reading is 7.5 points lower than the 90.5 recorded in August 2008 and 15.1 points lower than the 98.1 in August 2007. Presently the BCI is on about the same levels recorded in the first half of 2003," said the chamber.

Of the BCI sub-indices, inflation and the weighted Rand had year-on-year positive impacts in August.

SACCI said the majority of the BCI sub-indices have had a negative impact on the index both on a month-to-month and year-on-year basis.

The chamber said that from July to August this year five indices impacted negatively on the BCI.

"This downward pressure came from liquidations, real retail sales, less real credit extended to the private sector, depressed building activity and export volumes. Five sub-indices remained virtually unchanged.

"Import volumes, real financing costs and overall share prices made a positive impact," said SACCI.

SACCI further added that the South African economy found it difficult to gather momentum as the global economy struggled to find direction.

"The tenacity of South African Businesses have contributed to business confidence to sustaining reasonable levels under difficult circumstances."

It further added that business remains optimistic that the new government could cause a directional change by contributing to an enabling business environment despite the recession.