The South Africa. Chamber of Commerce and Industry’s Business Confidence Index (SACCI) fell to 99 points in July from 102.4 in June.
In its monthly index released on Wednesday, the chamber said the index deteriorated to its lowest thus far for 2011. “This is the first time since February 2010 that the year-on-year BCI is negative albeit by only 0.4 index point,” said SACCI.
The month-on-month decline of 3.4 in the index is the largest since 2009, said SACCI.
The BCI, which is put together from 13 indicators such as retail sales and inflation, has been rebased.
Between June and July, six of the 13 sub-indices improved with seven either negative or neutral to the index in July.
“The year-on-year changes in the BCI indicate that the present upswing may be faltering with important sectors remaining tentative. Five of the real economic sub-indices are performing weaker than a year ago and it is mainly the financial circumstances that are still better than in the previous year,” noted SACCI.
With the crises in Greece and the US dominating debate in July, excessive public spending still remains, with many economies and has to be rectified to ensure fiscal and economic sustainability in the long-term.
“Domestically, the ‘strike season’ is putting further pressure on an already embattled economy. Wage demands in excess of prevailing inflation levels, impact on the ability of businesses to create employment thereby contributing to poverty reduction,” said SACCI.
The chamber said with the global economy broadly characterised by stagnation, business confidence will continue to be a casualty with the consequence that positive employment prospects are further delayed. – BuaNews
