Business confidence index hits its lowest since 2004

After dipping to 96,9 in October, the South African Chamber of Commerce and Industry's (Sacci) business confidence index dropped even further in November to 95,8 - its lowest level since February 2004.

The last time it was lower for November was in 2003 when it registered at only 94,2.

Sacci said yesterday that apart from this month's sub-indices on international merchandise trade activity, the other real economic sub-indices of the index suggests that real economic activity is continuing to slow down.

Five of the 13 sub-indices of the index turned positive in November and eight sub-indices made a negative impact, as was the case in October.

Sacci said: "[It] noted that economic growth in prominent sectors that have been pushing growth for the last 12 to nine months, slowed by a half to two percentage points year-on-year.

"The October 2007 inflation data also indicates that inflation is accelerating and [though] producer inflation slowed down somewhat, it is still 1,5percent points higher than consumer inflation.

"This could lead to greater price instability if not managed prudently by business, policy makers and other role players."

"Of more concern to Sacci is that, apart from local pressures such as food security, the US dollar prices of crude oil, food and non-food agricultural products carried on soaring by rates that will accelerate local inflation. The increases in money supply and borrowing also still imply ample room for real credit extension and the accommodation of faster rising prices." - I-Net Bridge