https://www.engineeringnews.co.za

Business Confidence worsened in Q3 – RMB/BER

Business Confidence worsened in Q3 – RMB/BER

Photo by Bloomberg

3rd September 2013

By: Creamer Media Reporter

  

Font size: - +

Business confidence moved further into negative territory in the third quarter, declining by six points quarter-on-quarter to 42, the latest Rand Merchant Bank (RMB)/Bureau for Economic Research (BER) data shows.

Close to three-fifths of respondents in the RMB/BER Business Confidence Index (BCI) rated the prevailing business conditions as unsatisfactory.

Further, business confidence fell in three of the five sectors making up the RMB/BER BCI, with quarter-on-quarter declines of about 20 points recorded in the volatile new motor dealers and wholesalers sectors.

However, only a marginal two-point drop was recorded in the building sector, while confidence in the manufacturing and retailer sectors improved, with these subindices increasing by three and eights points respectively in the quarter.

RMB/BER noted that the decline in the BCI did not mean that South Africa’s economy was in the midst of a new cyclical downturn.

“For that to be so, underlying activity usually has to be weakening across all of the sectors, which is not the case; although new vehicle sales took a knock and building activity weakened unexpectedly, manufacturing output actually picked up and retail trade continued to expand. Still, sluggish (and volatile) economic growth is probably the best we can hope for in the period ahead,” it stated.

The deteriorating business confidence, coupled with the current widespread strike action, was likely to push economic growth back to about 2.5% in the second half of the year, compared with the 0.9% and 3% annualised rates recorded in the first two quarters of this year.

Investec's Kamilla Kaplan commented that there was scope for business confidence to strengthen as early as the fourth quarter this year, but more likely only in 2014, given the improving economic outlook in the core advanced economies, which should translate into an improvement in South Africa's export performance.

Meanwhile, the Southern African Chamber of Commerce and Industry (Sacci) also expressed concern over South Africa’s economic growth, saying the economy might be entering a phase of high inflation, continued high unemployment and subdued economic growth.

The chamber, which also released the results of its BCI, for August, on Tuesday, noted that strike action, slow economic growth, rising inflation and the rand exchange rate were challenges that had to be overcome.

“Many of the causes of poor economic performance could be ascribed to a domestic inability to address some critical issues relating to economic performance, such as the impact of disruptive labour conduct,” Sacci said.

The chamber added that it believed that nurturing an investment and business climate that promoted private sector participation and responsibility could resolve many of the concerns. “It is important that conditions supportive of economic growth are put in place urgently.”

The Sacci BCI had remained subdued in recent months, and fell back to 90.5 points in August, from 90.7 points in July. Although the BCI had remained at the around 90-point level for the past four months, this was below the average of 100 for the base year of 2010.

Sacci stated that this pointed to some unpredictable short-term movements in economic activity having impacted on the BCI subindices and having contributed to the lack of improvement in confidence.

On a month-on-month basis, only three of the 13 subindices showed positive movement, while eight made negative movements and two were neutral. On a year-on-year basis, nine subindices made negative contributions to the BCI and four were positive.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 
Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.095 0.159s - 174pq - 2rq
Subscribe Now