Confidence up, caution prevails

Johannesburg - The latest improvement in business confidence doesn't necessarily suggests employers will be looking for CVs anytime soon, economists have warned.

The South African Chamber of Commerce and Industry (Sacci) Business Confidence Index (BCI) for September rose to its highest level since November 2008, increasing to 85.5 from 83. The index provides a gauge of business confidence in the economy by following a number of key indicators which track business conditions.

"The improvement is in line with measures of economic and business confidence elsewhere in the world and provides further indication that both the local and global economy are slowly emerging from recession," said Nedbank economist Carmen Altenkirch.

"However, the index remains well below last year's level, reflecting the fact that operating conditions remain tough."

Elize Kruger, economist at KADD Capital, said the index supports other green shoots in manufacturing, the purchasing managers' index and retail sales, "which have already indicated things have started to get better now. However, I don't think we'll see job creation any time soon".

Econometrix economist Azar Jammine said he sees the economy stabilising. "But things haven't yet improved," he warned.

He said while certain sectors of the economy - for instance vehicle sales, manufacturing and retail - may have shown month-on-month improvements in September, the data were still down significantly compared to 2008.

"The rate of decline is diminishing," he said. "So while things are still deteriorating, they are deteriorating at a much slower pace."

He feels that in the fourth quarter of 2009, South Africa might move out of a recession.

- Fin24.com