Business confidence improved slightly in March amid higher share prices and exports‚ and a firmer rand‚ a monthly confidence index showed on Thursday.
The South African Chamber of Commerce and Industry’s (Sacci’s) business confidence index (BCI) rose to 81.2 in March from 80.1 in February. At 81.2 in March‚ the index was 7.9 index points below the March 2015 level.
Despite the slight improvement in the index‚ Sacci warned that rising inflation‚ higher electricity tariffs and weak economic growth would weigh on confidence.
“Given the sluggish growth performance of the world economy and low international commodity prices‚ the local economy will continue to experience challenges‚” Sacci CEO Alan Mukoki said.
Inflation could also rise to about 10% “if not managed”‚ Sacci said. Consumer inflation was already at 7% year on year in February and producer inflation at 8.1%.
“Sacci is concerned about the higher inflationary expectations‚ notably on input costs of business‚” Mr Mukoki added.
Sacci expects food prices to rise by between 20% and 25% on drought and raw agricultural produce and staple food imports. These are costlier because of the weak rand.
It was important that the “positive tone” set by the Constitutional Court judgment on Nkandla and the affirmation of the role of Chapter 9 institutions be supported by “appropriate policy action” that could improve the business climate‚ Sacci said.
Six (exports‚ imports‚ share prices‚ real private sector borrowing‚ precious metal prices and rand exchange rate) of the 13 indicators monitored monthly were positive; two (inflation and real financing cost) stayed unchanged; and five (municipal services‚ manufacturing‚ vehicle sales‚ retail sales and construction) were negative.
Sacci: ‘Inflation could also rise to about 10% if not managed’
Business confidence improved slightly in March amid higher share prices and exports‚ and a firmer rand‚ a monthly confidence index showed on Thursday.
The South African Chamber of Commerce and Industry’s (Sacci’s) business confidence index (BCI) rose to 81.2 in March from 80.1 in February. At 81.2 in March‚ the index was 7.9 index points below the March 2015 level.
Despite the slight improvement in the index‚ Sacci warned that rising inflation‚ higher electricity tariffs and weak economic growth would weigh on confidence.
“Given the sluggish growth performance of the world economy and low international commodity prices‚ the local economy will continue to experience challenges‚” Sacci CEO Alan Mukoki said.
Inflation could also rise to about 10% “if not managed”‚ Sacci said. Consumer inflation was already at 7% year on year in February and producer inflation at 8.1%.
“Sacci is concerned about the higher inflationary expectations‚ notably on input costs of business‚” Mr Mukoki added.
Sacci expects food prices to rise by between 20% and 25% on drought and raw agricultural produce and staple food imports. These are costlier because of the weak rand.
It was important that the “positive tone” set by the Constitutional Court judgment on Nkandla and the affirmation of the role of Chapter 9 institutions be supported by “appropriate policy action” that could improve the business climate‚ Sacci said.
Six (exports‚ imports‚ share prices‚ real private sector borrowing‚ precious metal prices and rand exchange rate) of the 13 indicators monitored monthly were positive; two (inflation and real financing cost) stayed unchanged; and five (municipal services‚ manufacturing‚ vehicle sales‚ retail sales and construction) were negative.