Business confidence marginally up in October

Wednesday, November 7, 2012

Pretoria - Business confidence has edged up marginally in October, says the South African Chamber of Commerce and Industry (Sacci).

Releasing the monthly Business Confidence Index (BCI) on Wednesday, Sacci said the business mood remained relatively depressed.

"The BCI improved by a meagre 0.3 index points from 91.7 in September 2012 to 92 in October 2012 and, although not convincing, the October number has at least contained the deterioration in the business confidence index," said Sacci.

In October 2012, BCI was 5.5 points below its October 2011 level last year but was better than the September 2012 year-on-year performance, which reflected a 6.7 point difference.

Sacci noted that business was broadly satisfied with Finance Minister Pravin Gordhan's Medium-Term Budget Policy Statement (MTBPS) presented before Parliament last month.

"To enhance business confidence, it is cardinal that delivery on the MTBPS framework prioritises those aspects which are key to economic growth. Despite the MTBPS, the outlook for the South African economy remains uncertain and will respond to critical policy decisions that will be taken by the governing party at its leadership conference in December 2012," it said.

The business index is compiled from 13 economic indicators that include inflation as well as retail sales.

The chamber also expressed concern that the estimated budget deficit could reach 7% of Gross Domestic Product (GDP) if current export and import trends continue. The budget deficit widened to 6.4% in the second quarter.

"It is of concern that 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 South African economy," it said. -