Global concerns weigh on business mood


7 November 2011


The Business Confidence Index declined by 0.9 points in October, the South African Chamber of Commerce and Industry (Sacci) reports, attributing the decrease to uncertain global conditions.


The index stood at 97.5, down from 98.4 in September.


“The decline indicates that the loss of business confidence has been more severe than anticipated,” Sacci said in a statement last week.


The year-on-year picture was a mixed bag, it said.


“The financial environment maintained a stable position compared to October 2010, but the depreciation of the weighted rand exchange rate and its volatility are cause for concern.”


The index, however, did show that the real economic environment on balance positively affected business confidence in October 2011 compared to October 2010.


“Four of the seven sub-indices were in positive territory.”


Sacci said South Africa’s relative financial stability could be described as “fair to positive” although the aggregate financial environment had deteriorated.


The slow pace of resolving the international public sector debt problems and low global economic growth contributed to uncertainty in the global business environment.


“The risks to global economic stability increased during October 2011 as the public debt problems appear to be more difficult to resolve and the strict measures forced upon indebted governments are difficult to apply from a socio-political perspective.”


Despite the uncertainty, Sacci said the general resolve was to reinstate prudent fiscal and monetary regimes.


“Business confidence remains very fragile under the present delicate and uncertain global financial conditions,” Sacci said.