Business confidence rebounds

2012-09-07 00:00

BUSINESS owners and managers must wait until next year for sustained and robust economic recovery, despite the rise in the latest South African Chamber of Commerce and Industry (Sacci) Business Confidence Index (BCI).

The BCI for August rose to 95 points from 90,9 in July, but remained in weak territory.

On Wednesday, the Rand Merchant Bank/Bureau for Economic Research BCI for the third quarter of 2012 also increased, coming in at 47 points in the third quarter from 41 in the second quarter.

The RMB/BER BCI, which is a survey based on the views of respondents, also remained in weak territory.

Sacci CEO Neren Rau told The Witness yesterday that a level of 110 points for the Sacci BCI was seen as pointing toward moderate economic growth.

“We’re in a volatile time in the current economic climate.

“The latest rebound could suggest that the four-point drop in July’s BCI was an overreaction.

“Business confidence is vulnerable and will continue to remain vulnerable in 2012.”

It also appears that the international trade environment is weakening, as the BCI’s export and import sub-indices declined on a month-on-month basis for the second straight month.

“This aspect is alarming to us,” said Rau. But he added that there appeared to be a basis for a long-term recovery in the BCI, which has been on a downward path since the beginning of 2011.

He said there were indications that manufacturing would improve and that the festive season would mark the beginning of a more sustained recovery.

Rau said the BCI had rebounded despite the recent tragic events at Lonmin’s Marikana mine.

He said mining’s relative contribution to South Africa’s gross domestic product had declined from about 10,4% of the total in 1994 to about 5,8% in 2012.

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