Johannesburg - Business confidence, as measured by
the South African Chamber of Commerce and Industry (Sacci), declined
further from 99.0 in July to 98.6 in August.
Sacci said that although the business confidence index (BCI) dipped by only 0.4 index points between July and August, it was 4.7 points below the August 2010 level. That was the biggest year-on-year (y/y) decline since the 5.2 point y/y decline in September 2009.
On a month-on-month basis, the sub-indices representing activity in the real economy had a more positive impact on the BCI in August than in July.
The tempo of decline in the BCI experienced in July appeared to have moderated, although the current level remained under pressure.
On a y/y basis, the real economic environment weakened noticeably as six of the seven economic activity sub-indices of the BCI were in negative territory, Sacci reported.
The financial environment, on balance, remained positive compared to August last year although two critical sub-indices, those of inflation and the exchange rate of the rand, deteriorated.
The month of August was also negatively impacted by the debt ceiling debate in the United States. The financial markets were further impacted when the US sovereign credit rating was reviewed.
A further negative development was that eurozone gross domestic product (GDP) showed signs of stalling, while China was tightening measures to quell inflation.
"These developments had a negative impact on the global economic outlook and on business confidence across the world, including South Africa," Sacci said.
Economic growth also slowed substantially between the first and the second quarters in SA.
Sacci added that the South African economy was also experiencing the further inflationary effects of price increases in certain consumer items like fuel, food and administrative prices. The rand exchange rate, which played a pivotal role in the inflationary process, depreciated in August.
Conventional fiscal and monetary measures to stimulate the global economy appeared to have been exhausted, Sacci suggested. It added that it was growing increasingly concerned about the current and expected low levels of growth, stagnation of economic activity and job losses.
Sacci said that although the business confidence index (BCI) dipped by only 0.4 index points between July and August, it was 4.7 points below the August 2010 level. That was the biggest year-on-year (y/y) decline since the 5.2 point y/y decline in September 2009.
On a month-on-month basis, the sub-indices representing activity in the real economy had a more positive impact on the BCI in August than in July.
The tempo of decline in the BCI experienced in July appeared to have moderated, although the current level remained under pressure.
On a y/y basis, the real economic environment weakened noticeably as six of the seven economic activity sub-indices of the BCI were in negative territory, Sacci reported.
The financial environment, on balance, remained positive compared to August last year although two critical sub-indices, those of inflation and the exchange rate of the rand, deteriorated.
The month of August was also negatively impacted by the debt ceiling debate in the United States. The financial markets were further impacted when the US sovereign credit rating was reviewed.
A further negative development was that eurozone gross domestic product (GDP) showed signs of stalling, while China was tightening measures to quell inflation.
"These developments had a negative impact on the global economic outlook and on business confidence across the world, including South Africa," Sacci said.
Economic growth also slowed substantially between the first and the second quarters in SA.
Sacci added that the South African economy was also experiencing the further inflationary effects of price increases in certain consumer items like fuel, food and administrative prices. The rand exchange rate, which played a pivotal role in the inflationary process, depreciated in August.
Conventional fiscal and monetary measures to stimulate the global economy appeared to have been exhausted, Sacci suggested. It added that it was growing increasingly concerned about the current and expected low levels of growth, stagnation of economic activity and job losses.