Business confidence in the doldrums
Business confidence, measured by the SA Chamber of Commerce and Industry (Sacci), registered a small month-onmonth decline in October, driven by lower imports and exports, rand depreciation and load-shedding.
The Sacci business confidence index (BCI) measured 91.7 in October, down 0.7 points from September’s reading. The index remains down 4.1 points on October 2018’s reading of 95.8.
Confidence levels appear to have hit a plateau, the chamber said on Thursday, at a time when policymakers have “little manoeuvring space” to set the economy on course.
October’s medium-term budget policy statement — which showed that economic growth is expected to reach only 0.5% in 2019, along with a sharp deterioration in government finances — saw ratings agency Moody’s Investors Service drop its outlook on SA government debt to negative.
“It is doubtful whether the current fiscal situation could be contained and reversed to inspire growth and employment,” Sacci said.
“Credit ratings agencies, lenders and investors are reluctant to make decisions in an uncertain environment.
“The need for economic growth and reducing unemployment must take centre stage,” it said in a statement.
According to the chamber, the monthly declines were driven by decreased merchandise export and import volumes, rand depreciation and disrupted energy supply.
The deeper annual declines were due to “notable” year-onyear decreases in merchandise export and import volumes, a decline in the value of building plans passed, lower all-share prices on the JSE and decreased real retail sales.