Pretoria-Business confidence recovered in August reaching 89.0 index points from 87.9 in July, according to the South African Chamber of Commerce and Industry (Sacci).
The Business Confidence Index (BCI) recovered by 1.1 index points from July to 89.0 in August 2014.
Sacci, as it released its monthly BCI on Wednesday, said the lower level of business confidence in August 2014 was at 90.5 as compared to last year was mainly caused by restrained real activity.
“Eight of the 13 BCI sub-indices still made a negative annual contribution to the BCI in August.”
On a month-on-month basis, six of the 13 sub-indices of the BCI were positive in August compared to five in July.
“Important sub-indices like manufacturing output, import volumes and building activity turned from negative to positive but within the context of a volatile BCI.
“Apart from inflation, real financing cost and share prices, the other three financial sub-indices, namely, private borrowing, precious metal prices and the rand exchange rate, made positive monthly contributions,” noted Sacci.
Sacci noted that the domestic business environment calmed following disruptions from protracted strike action.
“There were also glimmers of hope that could cause a change of direction (the lower oil price, inflation arresting). The domestic business environment calmed after disruptions from protracted strike action. However, the economy is still struggling to gain momentum and contend with the consequences of the wide-reaching labour market disruptions.”
The 1.3% year-on-year average growth of the economy in the first half of 2014 has lowered the prospects for growth in 2014 down to below 2%, said Sacci.
“South Africa’s biggest challenge is to accelerate the pace of economic growth. For this purpose, sound institutions and a relatively stable and predictable policy and investment environment are imperatives,” said Sacci. –SAnews.gov.za
