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Johannesburg - Business confidence in South Africa bounced back in the first quarter of the year following a year-long slump, economists said on Thursday.
The RMB/BER Business Confidence Index (BCI) jumped 14 points to 52 points, said Rand Merchant Bank chief economist Ettienne le Roux.
Business mood improved in all of the five sectors surveyed: new vehicle sales, building, retail, wholesale and manufacturing.
New vehicle dealer confidence increased the most, rising 29 index points to 73. A greater number of respondents reported higher sales.
Le Roux said the overall improved confidence was a welcome reversal of the declining trend seen throughout last year. Particularly pleasing was the rise in confidence of building contractors.
There was a 12 index point jump in the confidence of building contractors, bringing confidence to a three-year high of 31.
"It points to this sector finally having turned the corner," Le Roux said.
Retail and wholesale business confidence increased by 5 and 10 index points, to 61 and 48 respectively. Also positive was the improvement in manufacturing fixed investment trends which, if they could be sustained, would boost economic growth, job creation and productivity.
Manufacturing business confidence gained 12 index points, rising to 47.
Le Roux warned though that to expect business confidence to increase much more was "a big ask".
"It might well be that the first quarter gain reflected some catch-up from the final quarter of 2011, when confidence remained low despite some improvement in underlying business conditions."
The higher levels of confidence experienced by some sectors were not supported by better business activity, but were the result of expectations for improved conditions.
"Also the first-quarter survey was largely completed before what has been a not-so-consumer-friendly 2012 national budget and the most recent sharp increase in the petrol price," he said.
The RMB/BER Business Confidence Index (BCI) jumped 14 points to 52 points, said Rand Merchant Bank chief economist Ettienne le Roux.
Business mood improved in all of the five sectors surveyed: new vehicle sales, building, retail, wholesale and manufacturing.
New vehicle dealer confidence increased the most, rising 29 index points to 73. A greater number of respondents reported higher sales.
Le Roux said the overall improved confidence was a welcome reversal of the declining trend seen throughout last year. Particularly pleasing was the rise in confidence of building contractors.
There was a 12 index point jump in the confidence of building contractors, bringing confidence to a three-year high of 31.
"It points to this sector finally having turned the corner," Le Roux said.
Retail and wholesale business confidence increased by 5 and 10 index points, to 61 and 48 respectively. Also positive was the improvement in manufacturing fixed investment trends which, if they could be sustained, would boost economic growth, job creation and productivity.
Manufacturing business confidence gained 12 index points, rising to 47.
Le Roux warned though that to expect business confidence to increase much more was "a big ask".
"It might well be that the first quarter gain reflected some catch-up from the final quarter of 2011, when confidence remained low despite some improvement in underlying business conditions."
The higher levels of confidence experienced by some sectors were not supported by better business activity, but were the result of expectations for improved conditions.
"Also the first-quarter survey was largely completed before what has been a not-so-consumer-friendly 2012 national budget and the most recent sharp increase in the petrol price," he said.
