Business confidence remains depressed

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The survey noted that confidence among retailers and wholesalers remained well above long-term averages due to resilience in consumer spending. Photo: File
The survey noted that confidence among retailers and wholesalers remained well above long-term averages due to resilience in consumer spending. Photo: File

BUSINESS


Business confidence slipped further in the third quarter, displaying the level of dissatisfaction among businesses regarding prevailing business conditions.

This comes just a day after a report showed South Africa’s economy shrunk to pre-pandemic levels in the second quarter of 2022, contracting by 0.7% when compared to the first quarter.

READ: SA’s economy shrinks in Q2, now smaller than pre-pandemic levels

The business confidence index (BCI) conducted by Rand Merchant Bank (RMB)/ Bureau for Economic Research (BER) tells a story of a business environment that is made difficult by rising interest rates and inflation, as well as reduced disposable incomes and high levels of unemployment.

The BCI survey conducted between August 10 and 29 remained negative after slipping from 42 index points in the second quarter to 39 points in the third quarter.

The survey noted that confidence among retailers and wholesalers remained well above long-term averages due to resilience in consumer spending.

On Thursday, a report on consumer confidence will be released to reveal just how consumers have been responding to a myriad of challenges brought on by increased costs.

READ: Treasury moves to avert SA becoming grey listed

“None of this is to say that the economy will experience strong growth in the year ahead; external headwinds are mounting, interest rates will continue to rise while the danger of summer power outages is ever-present.

Ettienne le Roux, chief economist at RMB said: 

But, the suggestion that the economy is now in the throes of a protracted recession after yesterday’s GDP release is an overstatement.


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