Businesses hit by 'high costs, weak demand'

Tamlyn Stewart

Tamlyn Stewart

Business confidence slumped further in the third quarter, hit by higher interest rates, more expensive fuel and an acceleration in consumer inflation.

The Rand Merchant Bank Bureau for Economic Research business confidence index reported yesterday that most businesses "found themselves squeezed between rapidly rising costs and weaker domestic and foreign demand".

The index shows that only a third of those who responded to the survey were satisfied with business conditions, compared to four-fifths a year ago.

Business confidence fell to its lowest level since March 2001, with declining optimism in all sectors measured - new vehicle trade, wholesalers, building contractors, manufacturers and retailers.

The new vehicle sector took the biggest hit - confidence in that sector is at a nine-year low as new vehicle sales plunged due to high levels of household debt, more stringent credit requirements and the falling trade-in values of cars, the survey reported.