Oct 03, 2012
Labour disruptions to further damage depressed business moodBack
Africa|Education|Fairfax|Health|Mining|Moody|Africa|South Africa|United Kingdom|Illegal Mining Strikes|Product|Sacci
© Reuse this
The business confidence index (BCI) retreated by 3.3 index points to 91.7 in September, from 95 points in August. The BCI was 6.7 points below its level of September last year.
Sacci warned that labour relations in especially the mining sector could cause further damage to an already depressed business mood. “The illegal mining strikes raised investors’ sensitivity to South Africa’s unresolved challenges in the labour market.”
The organisation added that business confidence could change from “uncertain” to “unpredictable” if domestic disorder was not timeously resolved.
UK investment analyst firm Fairfax said the ongoing debate about wages needed action from government, warning that the country’s mining sector could become “uninvestable”.
Sacci also said unresolved fiscal issues and a lack of global economic growth were plaguing business and investor confidence.
The slight improvements in the BCI towards the end of 2011 and early 2012, when it stood at 99 points, were followed by a marked deterioration of 2.6 points in the second quarter and 1.5 points in the third quarter.
“The slight optimism in business confidence that prevailed until recently gave way to pessimism as a lack of direction towards sound policy and implementation are impacting the fundamentals of the South African economy."
Only three subindices were positive on a month-on-month basis compared to six in August, while both the financial and real economic subindices fared worse in September compared with the previous month.
“On an year-on-year basis, eleven of the thirteen subindices declined in September and only two were positive. This is a dramatic turnaround on the situation in August, when nine subindices made a positive contribution to the business climate.”
Sacci noted with concern the most recent downgrade of the South African government bonds by ratings agency Moody’s and South Africa’s loss of two positions in the 2012/13 World Economic Forum (WEF) competitiveness rankings to 52 from 50 out of 144 countries in the previoous year.
In the WEF report, released during September, South Africa is rated in the category of effiency-driven economies, in other words where countries had to begin developing more efficient production proceses and increase product quality because wages had risen and prices might not be further increased.
“Unfortunately, labour incidents in South Africa will not be helpful in enhancing either these prospects, global competitiveness or South Africa’s rating amongst investors,” Sacci said.
In the report, South Africa’s worst-performing competitiveness areas were health, primary education and labour markets, while financial markets and market size help the country’s competitiveness strength.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Creamer Media Senior Researcher and Deputy Editor Online
Updated 7 minutes ago Democratic Alliance leader Mmusi Maimane tweeted a photo of a page from the police minister's report on the upgrades at President Jacob Zuma's private home in Nkandla ahead of its release to the media later on Thursday. “This is at my desk now. Working through it...
Updated 1 hour 9 minutes ago A senior Department of Trade and Industry (DTI) official has admitted that the roll-out of South Africa’s industrial policy has, to date, been “suboptimal”, partly owing to a lack of coordination within government on key elements of the policy, including local...
Updated 1 hour 11 minutes ago A survey on the 2014 performance of the South African plastics industry has shown that 1.4-million tons of plastics from domestic production and imported materials were converted over the year, remaining flat on volumes seen in the prior year. The results, released...
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...