Business confidence index down

2007-11-29 00:00

The reading shows that about two thirds of respondents are satisfied with business conditions.

Business confidence is down from 80 recorded six months ago and 88 three years ago.

Reduced volumes and lower price margins appear to be the primary drivers of the decline.

Successive interest rate hikes on top of high outstanding household debt levels, and the introduction of the National Credit Act are curbing volumes in most of the credit driven consumer sectors.

Rising inflation on the back of food and petrol price hikes are hurting purchasing power. With demand weaker, businesses are unable to pass on hikes to their consumers. Companies had to absorb part of the costs, which puts profits under pressure and lowers business confidence.

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