Pretoria - Business confidence declined 87.9 in July the lowest level since September 1999, said the South African Chamber of Commerce and Industry (Sacci).
“The Sacci Business Confidence Index (BCI) declined to 87.9 in July 2014 which is its lowest level since the 86.9 of September 1999. The index picked up marginally to 89.7 in June from 88.9 in May 2014 before receding,” said Sacci in its monthly BCI.
On a monthly basis five of the 13 sub-indices of the BCI were negative compared to eight in June.
Important sub-indices like manufacturing output, import volumes and building activity made negative month on month contributions to the BCI in July.
Ten of the 13 sub-indices made a negative year on year contribution to the BCI while international developments were responsible for the positive contributions made by share and precious metal prices.
“Despite low business confidence, SACCI welcomes the balance being tilted towards a more positive outlook for the world economy for the rest of 2014. An improved European Recovery and affirmation of South Africa’s AGOA [Africa Growth Opportunities Act] status could positively influence trade to and from South Africa."
Additionally Sacci expressed concern about the employment outlook.
“Sacci is concerned about the employment outlook and the impact that declining employment will have on income inequality and possible increases in the Gini coefficient. This will further negatively affect the real disposable income of households and their expenditure potential which is already under pressure.
Rising unemployment is one of the immediate consequences of high wage demands supported through strike activity,” it said.
The secondary economic consequences (including potential adverse impacts on income distribution) will surface more starkly in the medium term,” noted Sacci.-SAnews.gov.za
