SA business confidence up by 11 points

BUSINESS confidence increased in the first quarter by 11 points in a sign that the economy is picking up pace, a survey showed yesterday.

The Rand Merchant Bank business confidence index compiled by the Bureau for Economic Research increased to 45 points in the first quarter from 34 points in the fourth quarter but remained below the 50-mark separating the net positive and negative territories.

“First quarter confidence jump is driven more by the expectation that the recent (mainly) market-friendly political development will boost activity levels in future than an immediate improvement in the real economy,” chief economist at RMB Ettienne le Roux said.

Business confidence was dented by policy uncertainty under the leadership of former president Jacob Zuma but economists say President Cyril Ramaphosa’s election as leader of the ANC in December, and as president last month, has raised expectations that the country will make economic reforms.

The economy grew more than expected at the end of last year as agriculture and trade recovered, data showed last Tuesday, boosting its chances of avoiding a potentially debilitating credit ratings downgrade.

This month, the SA Chamber of Commerce and Industry’s (Sacci) monthly business confidence index decreased to 98.9 last month from 99.7 in January as exports, imports and retail sales fell. – Reuters