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Johannesburg - Business confidence contracted in February compared to the previous month, the SA Chamber of Commerce and Industry (Sacci) said on Thursday.
"Despite this month's contraction, upward momentum was considered not to have been lost and it is believed that the BCI (business confidence index) will continue its path to recovery since the trough in business confidence in the first quarter of 2009," Sacci said in a statement.
The BCI was 86.4 in February 2011 from 87.4 in January.
It was, however, 3.4 index points higher in February 2011 than in February 2010.
The various sub indices making up the index gave mixed signals.
The exchange rate and the real cost of financing were negative, indicating "the financial environment appears to be leaning towards tighter financial conditions in future".
Although there was a year-on-year improvement, Sacci was still concerned that manufacturing output and construction were failing to gather pace despite a more positive outlook for economic growth.
"Several global developments during February 2011 placed the present world economic recovery in jeopardy," Sacci said.
These included the political turmoil in the Middle East and North Africa, which had pushed up the price of crude oil.
"Geo-political developments as well as the problems with scarce natural resources have again started to torment the recovery of the world economy.
"In the immediate future, business confidence might be severely tested given economic uncertainty and possible price instability," Sacci warned.
"Despite this month's contraction, upward momentum was considered not to have been lost and it is believed that the BCI (business confidence index) will continue its path to recovery since the trough in business confidence in the first quarter of 2009," Sacci said in a statement.
The BCI was 86.4 in February 2011 from 87.4 in January.
It was, however, 3.4 index points higher in February 2011 than in February 2010.
The various sub indices making up the index gave mixed signals.
The exchange rate and the real cost of financing were negative, indicating "the financial environment appears to be leaning towards tighter financial conditions in future".
Although there was a year-on-year improvement, Sacci was still concerned that manufacturing output and construction were failing to gather pace despite a more positive outlook for economic growth.
"Several global developments during February 2011 placed the present world economic recovery in jeopardy," Sacci said.
These included the political turmoil in the Middle East and North Africa, which had pushed up the price of crude oil.
"Geo-political developments as well as the problems with scarce natural resources have again started to torment the recovery of the world economy.
"In the immediate future, business confidence might be severely tested given economic uncertainty and possible price instability," Sacci warned.
