Johannesburg - Business confidence improved in February, according to the
Business Confidence Index (BCI) released by the SA Chamber of
Commerce and Industry (Sacci) on Wednesday.
The BCI increased by 1.8 index points between January and
February 2010, registering 83 in February 2010.
This was 1.5 points below the February 2009 level.
"The BCI has performed as expected in February 2010 with
business confidence responding to positive medium-term economic
developments," Sacci said.
Despite fewer sub-indices having a positive impact on the BCI in
February 2010 than in January 2010, lower liquidations data and
increased manufacturing output had a significant impact, Sacci
However, the negative influence of international trade through
both import and export volumes continued to weigh on the local
business environment, it said.
On a year-on-year basis, eight sub-indices had a positive impact
on the BCI in February 2010 - two more than in January 2010.
The additional positive contributions in February came from
sub-indices on real economic activity, suggesting enhanced levels
for the BCI in 2010, Sacci said.
In February, a number of major events and announcements
supported greater economic optimism, but there were also a number
of factors that contributed to uncertainty or the possibility of
unintended outcomes over the medium term, Sacci added.
"Service delivery as prioritised by the President in his State
of the Nation Address is essential in ensuring fiscal discipline
and value for budgeted allocations.
"Debt servicing cost will cause a significant shift in
functional expenditure towards the category general public services
over the next three years, unfortunately at the expense of mainly
Sacci said fourth quarter 2009 gross domestic product data
indicated that although the volume of goods and services produced
was still 1.4% less than a year ago, the turnaround that
started in the third quarter 2009 was gathering momentum.
Unintended economic consequences would emerge as the relative
price of electricity and its share of costs to business and
consumer expenditure changed substantially, Sacci added.
"Business confidence would have received stronger support if the
approach to electricity supply and pricing had been appropriately
managed over the longer term."