Mood is sta­ble

Lower turn­ing point may be in sight

Finweek English Edition - - Economic Trends & Analysis - GRETA STEYN gre­tas@fin­

ECO­NOMIC IN­DI­CA­TORS are still paint­ing a mis­er­able pic­ture of South Africa’s econ­omy. How­ever, busi­ness con­fi­dence in­di­ca­tors pro­vide some rea­son for op­ti­mism, as they sug­gest the lower turn­ing point is near. There are two main busi­ness con­fi­dence in­dices (BCI) in SA: that of the SA Cham­ber of Com­merce and In­dus­try (SACCI) and that of Rand Mer­chant Bank (RMB)/Bureau for Eco­nomic Re­search (BER).

The SACCI in­dex isn’t a sur­vey of busi­ness sen­ti­ment but a busi­ness cy­cle in­di­ca­tor com­piled by us­ing 13 sub-in­dices of statis­tics. The RMB/BER in­dex is a more ac­cu­rate gauge of sen­ti­ment.

The RMB/BER BCI de­clined by just one in­dex point dur­ing sec­ond quar­ter 2009 to 26. As was the case dur­ing the first quar­ter, the de­cline in busi­ness con­fi­dence lev­els is sur­pris­ingly small in view of poor ac­tual busi­ness con­di­tions. That points to per­cep­tions SA’s econ­omy is ap­proach­ing the lower turn­ing point of the cur­rent cy­cle.

The SACCI BCI for May 2009 de­clined marginally to 81,8 and SACCI said as yet it pro­vided no ev­i­dence of an ap­proach­ing re­cov­ery. How­ever, the SACCI BCI has now re­mained around the 82 level for the past few months.

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