Business Confidence recedes in January
Pretoria - Business Confidence receded in January, the South African Chamber of Commerce and Industry (Sacci) said on Tuesday.
“The Sacci Business Confidence Index (BCI) receded to 90.5 in January 2014 from 91.1 in December 2013,” said Sacci in its monthly release.
Between December and January five sub-indices turned positive, three remained roughly unchanged and five were negative.
“The BCI was 3.5 index points below the January 2013 level. The January 2014 reading is the lowest for the BCI since August 2013 and compares unfavourably with the level of 100 for the 2010 base year and the 100.7 for the BCI at the trough of the current business cycle in September 2009,” said the chamber.
On a year-on-year basis only two sub-indices made positive contributions to the BCI, said a concerned Sacci, adding that ten had a negative impact and one was neutral.
“The year-on-year decline in business confidence bodes poorly for growth, employment and the capacity to address vulnerabilities in the economy.”
January 2014 was characterised by important developments in the global and domestic financial sphere. The tapering of the monetary stimulus in the USA has sent ripples through global financial markets and impacted the international flow of funds. This had serious effects on the exchange rates of emerging markets in particular.
Sacci encourages policy makers to be prepared if a significant tightening of global financing conditions continues. In response to subdued economic growth, South Africa must pay urgent attention to facilitating fixed investment. South Africa’s immediate vulnerabilities, the deficit on the current account, the quality of capital inflows (mostly portfolio) that expose the rand to severe pressure and the size of budget deficit, are risk elements that demand on-going attention. – SAnews.gov.za
