A boost in confidence

Kea' Modimoeng

Kea' Modimoeng

Business confidence staged a minor u-turn in July, with the South African Chamber of Commerce and Industry's (Sacci) business confidence index rising for the first time since March.

The Business Confidence Index pulled away from June's four-and-a-half year low, increasing slightly from 92,6 in June to 92,8 as concerns about the health of the economy eased.

Sacci economist Bill Lacey said: "The three positive elements which can be drawn out of this are the reduction in liquidations, increase in export volumes and the decrease in real financing costs.

"Negative indices are manufacturing, construction, inflation, share prices, precious metal prices and the rand exchange rate."

Lacey said the chamber was not sure if this marginal increase was as a result of a turnaround in business confidence.

"Business uncertainty is brought on by a lot of socio-political factors such as the recent industrial actions, the arms deal and the current situation in the ANC leadership," he said.

Lacey estimated that the decline in business confidence would be over by early next year.

Erwin Rode, an independent economist, suggested the "appointment of competent managers in government from ministerial level to administration" as a remedy for low business confidence.

"We furthermore need to increase our efforts in the fight against crime and in the long-term look at issues such as enhancing the quality of our education system because half-skilled graduates compromise productivity in the workplace."

Rode also emphasised that some of the current government programmes needed to be revised.

"One other serious aspect to revise is the grants issue because we have about 12million people who benefit from these grants and the base of taxpayers is very minimal compared to it," he said.

Sacci said it remained concerned about recent social and political developments and their potential to hurt business confidence over the next couple of months.

It urged economic role players to increase their efforts in the process of building and strengthening the country's business confidence.