Information services firm, Experian South Africa, on Thursday said the South African business debt stress was at its worst level since the 2008 global financial crisis.

The latest Experian Business Debt Index (BDI), released on Thursday, showed a significant decline to a level of 0.082 in the final quarter of 2015, from 0.263 in the third quarter and following a recent peak of 0.6 in the first quarter of 2014.

The index is constructed around a mean value of zero, with values above zero indicating less business debt stress and values below zero indicating more business debt stress.

Michelle Beetar, MD of ExperianSA, said the BDI is now registering its weakest level since the domestic economic recovery got underway in 2010, following the global financial crisis of 2008/9.

“Continuing to remain just above the zero line, the BDI suggests however, that overall business debt conditions are not yet dire and that we are not witnessing a major collapse in economic activity at this point in time,” Beetar said.

ExperianSA said a number of combined factors had caused a reduction in the rate of improvement in business debt conditions in the fourth quarter of 2015.

These included the slowdown in the South African economy, caused by a slump in international commodity prices, which in turn had a knock-on effect that caused negative growth in exports, leading to the depreciation in the Rand’s exchange rate and creating inflationary pressures, forcing the Reserve Bank to increase interest rates twice in 2015.

ExperianSA said the deterioration in business debt conditions in the fourth quarter was broadly distributed across most sectors of the economy, with one exception; manufacturing.

This is because the marginal improvement in the manufacturing sector came off a low base, where, a year earlier, the metal industries strike had a major impact, Beetar said.

The information firm said the resultant decrease in the growth of disposable income and increase in debt servicing costs, weighed down on the debt servicing ability of the domestic business community.

“There has undoubtedly been a relative weakening in business debt conditions. And with inflation and interest rates set to rise in coming months, there is bound to be further noticeable deterioration in the financial health of the business sector through 2016,” Beetar said.