Sacci survey affirms country’s bleak economic outlook

THE latest SA Chamber of Commerce and Industry’s (Sacci) survey released yesterday added to a chorus of reports that have indicated the scale of South Africa’s economic woes.

“Trade expectations for the next six months were dull and changed to a negative outlook for the first time since the middle of 2009, according to Sacci’s trade conditions survey for October,” said Sacci.

The survey affirmed the country’s bleak economic outlook, which has seen Finance Minister Nhlanhla Nene revise his economic projection, during his medium-term budget policy statement, to about 1.5 percent this year.

Nene expects local growth to increase marginally to 1.7 percent next year. According to the survey, the seasonally adjusted Trade Expectations index (TEI) at 50 was bordering on negative in October, while the non-adjusted TEI was 47 compared with 61 a year ago.

“We are in a desperate type of situation,” Richard Downing, a Sacci economist, said yesterday during the launch of the report, referring to the subdued domestic economic outlook, labour unrest coupled with the 25 percent unemployment rate.

Weak economy

According to the report, trade conditions had improved marginally in October compared with September, and October still bordered on positive territory with the seasonally adjusted composite Trade Activity index measuring 47 compared with 46 in September. Last October it was 54.

Standard Bank senior economist Shireen Darmalingam said the banking group expected economic growth of 1.1 percent next year.

“We need to become more accustomed to the low-growth profile for the next two to three years,” said Darmalingam.

In another development, the BankservAfrica economic transaction index (BETI) released yesterday indicated that transaction volumes pointed to a very weak economy that was not experiencing significant growth.

The monthly change in the BETI showed an increase in October, indicating that the decline in previous months has been slightly arrested: the quarterly changes still show a shrinking economy, but less so than in September.

According to the October BETI report, that was the first month with a positive increase in the last four months and only the second increase in the last six months when compared month on month.

“This indicates that concerning economic conditions remain, but with a degree of resilience,” the report said.

The BETI measures South African payment system transactions, smaller than R5 million, giving a broad picture of the current local economy.