In partnership with
Loading...

SA business confidence for June dips below level of a year ago

Jul 10 2018 11:42

For the first time this year, the Business Confidence Index (BCI) of the SA Chamber of Commerce and Industry (Sacci) has dipped below the level of a year ago, the chamber announced on Tuesday.

Sacci's BCI for June 2018 came in at 93.7, which is 1.2 index points lower than its level of 94.9 in June 2017. It was at 94 in May 2018. Meanwhile the average BCI in the first six months of 2018 was 97.6, compared to an average of 95 in the first half of 2017, and 93.7 in the second half of 2017.

The biggest negative month-on-month influences on the business climate were a weaker rand exchange rate, lower real retail sales, the decreased real value of building plans passed, and the higher, less stable, cost of energy supply.

Higher merchandise import and export volumes, as well as increased new vehicle sales, made positive month-on-month contributions, said the chamber. 

"There are indications that, although fiscal challenges remain, government debt is showing signs of being contained, albeit at a high level," Sacci said in its BCI statement.

"Rating agencies suggest negative factors are mitigated by government’s debt structure and a sound banking sector. Financial challenges of state institutions, however, remain substantial and government debt must be stabilised."

Sacci noted that SA has, of late, experienced a sharp weakening in its balance of payments position. This has resulted in a larger deficit on the current account, as well as net selling of bonds and shares by non-residents. This led to additional volatility and weakening of the rand exchange rate.      

"The risk of a global trade war has alerted certain industries in SA and they have already indicated that it would affect industries and employment negatively, while knock-on effects have been cited by complementary industries and their export performances," commented Sacci. "It has become imperative that structural economic matters hampering inclusive economic growth should be addressed with economic rationality. Uncertainties surrounding economic policy direction and position should be clarified so that investor and business confidence can reaffirm itself."

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

Follow Fin24 on Twitter and Facebook. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

NEXT ON FIN24X

 
 
 
 

Company Snapshot

#SAVINGSMONTH

Five of SA's top financial brains, including SARB governor Lesetja Kganyago share their best savings habits.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

I am not in a position to save because:

Previous results · Suggest a vote

Loading...