Business confidence rises, but too slowly for Sacci

BUSINESS confidence improved last month, but it was still not at a convincing level for investors and was still unacceptably low, the SA Chamber of Commerce and Industry (Sacci) said yesterday.

Sacci said that although its business confidence index rose to 93 points in December last year from 91.7 points in November, the fourth quarter was the poorest performing quarter of the year.

“Although the pace of decline in business confidence moderated during the year, the level at the end of 2012 was still unacceptably low,” Sacci said.

However, the promise of improvements in business confidence would only be realised if the threats of continued labour protests, already revealed in the early days of 2013, were dealt with decisively.

Sacci advised that the first step towards a more conducive business environment in 2013 was for the socio-economic partnership between the government, business and labour to urgently realise a commonality of approach in responding to the country’s current socioeconomic crisis.

Other concerns about labour unrest and militancy were that it might contribute to the country being cited as an unreliable supplier, which could dent its standing as a trade partner.

Sacci said a positive contribution to business confidence, on both a monthly and an annual basis, came from manufacturing and construction activity, while all the financial sub-indices had a positive impact, with the exception of the rand exchange rate.

However, municipal services, import volumes and retail sales made negative contributions to the index on both a monthly and annual basis.

Sacci said the tighter fiscal position of the public sector and serious service delivery failures in this sector were causes for concern as they risked retarding economic growth and job creation.

There were signs of a possible recovery in certain real activities towards the end of 2012. Export volumes, real credit extension, new vehicle sales, manufacturing output and building plans passed all improved from a year earlier.

The monetary policy stance was making a positive contribution towards the business climate and might be carrying more than its share of the policy burden, the chamber said.