Pretoria - Business confidence remained under pressure in February declining to 93 points, the South African Chamber of Commerce and Industry (Sacci) said in its monthly Business Confidence Index (BCI).
“Business confidence remained under pressure in February 2013 and, although the January 2013 SACCI BCI figure improved slightly from 93 points in December 2012 to 94, the business climate fundamentals remained weak as reflected by the critical sub-indices from which the SACCI BCI is compiled.
“This relegates the marginal improvement in January to initial optimism about 2013,” said Sacci on Thursday.
In February the BCI came in at 93 points from the 94 points recorded in January. Sacci said the decline in the BCI was the result of real economic activity as well as well as the financial environment failing to support a sustained improvement in business confidence.
According to the survey, seven of the 13 BCI sub-indices impacted negatively on a monthly basis. However, merchandise export volumes seasonally adjusted, real retail sales, as well as the weighted average exchange rate of the rand were the only sub-indices driving the BCI higher in February.
The annual performance of the BCI sub-indices is of even greater concern, with 10 sub-indices being negative and only new vehicle sales, share prices and real borrowing by the private sector making positive contributions to the BCI.
Finance Minister Pravin Gordhan’s recently tabled National Budget 2013, was an important event, said the chamber, in the context of the recent strikes and slow economic growth.
“Sacci is concerned that the substantial trade account deficit for January 2013 (even after seasonal adjustment) exposed vulnerability of the local economy (and particularly the rand exchange rate) to such developments.
“With the Budget deficit above 5% of GDP and an anticipated deficit on the current account of the balance of payments close to 6% for 2013, a combined twin deficit of more than 11% of GDP is high by global standards,” said Sacci.
In the budget speech, Gordhan said that the budget deficit will fall from 5.2% of GDP in 2012/13 to 4.6% in 2013/14 and 3.1% in 2015/16.
The implemented outcomes of budget 2013, said Sacci, and the potential improvements in financial discipline and accountability in the broader public sector will determine the extent to which South Africa progresses towards the desired goals of the National Development Plan in the short term, said Sacci.
Sound and sustainable public finance management is a key contributor to possible improvements in the business climate.
The objectives of the NDP are to eradicate poverty as well as to sharply reduce inequality by 2030. - SAnews.gov.za