Publications
Partners
Johannesburg - The RMB/BER Business Confidence Index (BCI) declined to 44 in the fourth quarter from 47 in the third quarter, it was announced on Tuesday.
A reading of 44 indicates that more than four out of ten senior managers in the manufacturing sector, building sector, retail trade, wholesale trade and new vehicle trade were satisfied with prevailing business conditions in the fourth quarter.
The index is currently at almost the same level as at the beginning of 2010, when confidence improved sharply.
“Business confidence has therefore essentially moved sideways this year,” said the RMB and BER analysts.
Although the RMB/BER BCI has not moved much over the quarter, the constituent sectors showed more change.
“The jump in confidence levels of manufacturers and retailers is notable in that it almost fully countered the declines in the other three sectors,” they said.
Confidence in the manufacturing sector increased from 30 to 41. This is the highest level since the onset of the global banking crisis in the second quarter of 2008.
“Encouragingly, after moving sideways for most of the year, confidence in manufacturing now seems to be catching up with retail, wholesale and new motor trade. Manufacturers of both export goods as well as those supplying the domestic market have seen sentiment improve,” said the RMB and BER.
Also recording an increase in business confidence was the retail sector. The index jumped by 11 index points from 52 to 63, making this the highest level of all the sectors in the survey. The increase in the confidence of retailers selling non-durable goods was especially pronounced.
Regarding the remaining three sectors which registered declines, confidence in the building and wholesale sectors only deteriorated moderately, while in the case of new vehicle trade, confidence fell sharply. Building confidence declined to 20 (from 25 in the third quarter) and wholesale confidence to 47 (from 50). It is important to point out that confidence in the building sector remains much lower compared to the other sectors. Building confidence is currently about half that of the second lowest sector, manufacturing.
Confidence among new vehicle traders fell sharply by 28 index points from 79 to 51 during the fourth quarter. This decline takes confidence levels back to more or less the same level as in the second quarter (47), suggesting that the third quarter number of 79 was artificially boosted in anticipation of increased sales before the carbon tax on new vehicles became effective. Confidence in the fourth quarter may also have been dented by the fact that some dealers struggled to get hold of certain models, as industrial action at vehicle manufacturing plants disrupted supply to the local market.
