Full recovery only in Q4

2011-06-09 00:00

THE South African Chamber of Commerce (Sacci) has revised its economic outlook with regard to the prospects for robust economic activity in 2011.

Sacci CEO Neren Rau told The Witness yesterday that the organisation expects to see robust economic activity materialise in the fourth quarter of 2011, adding that it is difficult to make a prediction about the country’s economic prospects beyond this timeframe.

The chamber had previously expected a positive outcome in economic activity to register by mid-year.

Rau’s comments came on the back of the release of Sacci’s Business Confidence Index (BCI) for May 2011 yesterday, which came in at a level of 85,8, which is 1,1 points lower than April 2011.

The BCI is a composite index that takes into account 13 key macro-economic indicators that affect the decisions made by businesses.

“It is a very conservative index that looks at whether businesses are putting money behind their decisions,” Rau added.

The latest Sacci BCI followed a softer Rand Merchant Bank/Bureau for Economic Research Business Confidence Index released on Tuesday, which showed that more than half of the survey respondents surveyed are dissatisfied with prevailing business conditions, largely as a result of negative sentiment in the trade sector.

Rau said that although the May 2011 Sacci BCI was higher than the May 2010 figure, it showed that the domestic and global economies face significant challenges.

“We usually are able to talk up the figure. However, it is difficult to do so this time around.”

The index was dragged down by export and import volumes, real financing costs, new vehicle sales and retail sales.

Rau said, “Consumers are now very cautious about consumption. Although this can be a responsible approach, it is not a very good sign when businesses are trying to ramp up consumption to trigger a strong recovery.”

He said that BCI revealed a sedate and unexciting level of economic activity taking hold in the domestic economy.

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