SA business confidence dips further

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(File)
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Johannesburg - South Africa's quarterly business confidence index continued its decline in the second quarter of 2015 as demand fell following a temporary improvement at the start of the year, a survey showed on Wednesday.

The Rand Merchant Bank (RMB) survey, conducted by the Bureau for Economic Research (BER), fell to 43 points in the second quarter from 49 in the previous three months.

The index was dragged lower by a drop in confidence among new vehicle dealers and retailers, sectors that had shown improved sentiment in the previous quarter, the report showed, while builders and manufacturers remained pessimistic.

"A lack of demand lies at the heart of the decline in business confidence in the second quarter," said Ettienne le Roux, chief economist at RMB.

Uncertainty was also increased by an economy made vulnerable by economic policy, labour developments and the escalation of electricity cuts by power utility Eskom, the report noted.

Concern over rising petrol prices and growing jitters of higher electricity tariffs also dented confidence, it said.

The RMB/BER BCI index has hovered below the neutral 50 mark for past five years, consistent with a stagnating economy.

The economy is the midst of its worst power crunch in seven years, which contributed to slower growth of 1.3% in the first quarter.

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