The SA Chamber of Commerce and Industry Business Confidence Index (BCI) for January 2014 dropped to 90.5 in January 2014 from 91.9 in December 2013.
Between December 2013 and January 2014, five sub-indices turned positive, three remained roughly unchanged, and five were negative, the chamber said in a statement.
The BCI was 3.5 index points below the January 2013 level.
The January 2014 reading was the lowest for the BCI since August 2013 and compared unfavourably with the level of 100 for the 2010 base year and the 100.7 for the BCI at the trough of the current business cycle in September 2009.
"It concerns Sacci that on a year-on-year basis, only two sub-indices made positive contributions to the BCI, 10 had a negative impact and one was neutral.
"A major activity like exports continued to improve while municipal services made a minor contribution to the January 2014 BCI, with the latter coming off a low base.
"The year-on-year decline in business confidence bodes poorly for growth, employment and the capacity to address vulnerabilities in the economy," Sacci said.
January 2014 was characterised by important developments in the global and domestic financial sphere. The tapering of the monetary stimulus in the US had sent ripples through global financial markets and affected the international flow of funds. This had serious effects on the exchange rates of emerging markets in particular.
"Sacci encourages policy makers to be prepared if a significant tightening of global financing conditions continues. In response to subdued economic growth, South Africa must pay urgent attention to facilitating fixed investment."
South Africa's immediate vulnerabilities, the deficit on the current account, the quality of capital inflows (mostly portfolio) that exposed the rand to severe pressure and the size of budget deficit, were risks that demanded ongoing attention.
South Africa's competitive position among other emerging markets was not favourable. It was clear that South Africa's rand was regarded as vulnerable in relation to other emerging market currencies and it ranked at the lower end of its peer group.
South Africa's budget and current account deficits as a percentage of GDP, was the second highest at 11.3 percent - second only to Egypt at 16.2 percent of GDP.
"Despite the current weak economic performance Sacci is of the opinion that disciplined policy responses will bear positive results over the medium to long-term," it said.
Business confidence dips further: SACCI
The SA Chamber of Commerce and Industry Business Confidence Index (BCI) for January 2014 dropped to 90.5 in January 2014 from 91.9 in December 2013.
Between December 2013 and January 2014, five sub-indices turned positive, three remained roughly unchanged, and five were negative, the chamber said in a statement.
The BCI was 3.5 index points below the January 2013 level.
The January 2014 reading was the lowest for the BCI since August 2013 and compared unfavourably with the level of 100 for the 2010 base year and the 100.7 for the BCI at the trough of the current business cycle in September 2009.
"It concerns Sacci that on a year-on-year basis, only two sub-indices made positive contributions to the BCI, 10 had a negative impact and one was neutral.
"A major activity like exports continued to improve while municipal services made a minor contribution to the January 2014 BCI, with the latter coming off a low base.
"The year-on-year decline in business confidence bodes poorly for growth, employment and the capacity to address vulnerabilities in the economy," Sacci said.
January 2014 was characterised by important developments in the global and domestic financial sphere. The tapering of the monetary stimulus in the US had sent ripples through global financial markets and affected the international flow of funds. This had serious effects on the exchange rates of emerging markets in particular.
"Sacci encourages policy makers to be prepared if a significant tightening of global financing conditions continues. In response to subdued economic growth, South Africa must pay urgent attention to facilitating fixed investment."
South Africa's immediate vulnerabilities, the deficit on the current account, the quality of capital inflows (mostly portfolio) that exposed the rand to severe pressure and the size of budget deficit, were risks that demanded ongoing attention.
South Africa's competitive position among other emerging markets was not favourable. It was clear that South Africa's rand was regarded as vulnerable in relation to other emerging market currencies and it ranked at the lower end of its peer group.
South Africa's budget and current account deficits as a percentage of GDP, was the second highest at 11.3 percent - second only to Egypt at 16.2 percent of GDP.
"Despite the current weak economic performance Sacci is of the opinion that disciplined policy responses will bear positive results over the medium to long-term," it said.
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