FANews
FANews
RELATED CATEGORIES
Category Economy
SUB CATEGORIES Budget 2017 |  Budget 2018 |  Budget 2019 |  Budget 2020 |  Budget 2021 |  Budget 2022 |  Budget 2023 |  Budget 2024 |  General | 

Tough Economic Conditions Affect Business Confidence

04 July 2008 South African Chamber of Commerce and Industry (SACCI)

SACCI today released its Business Confidence Index (BCI) for June 2008. The SACCI Business Confidence Index (BCI) declined further to 92.6 in June 2008 after measuring 93.0 in May 2008. The only positive contributions to the BCI in June 2008 was from manufacturing and building plans passed. Nine sub-indices had a negative impact while two did not affect the BCI’s movement in June 2008.

Since a record level of 103.5 was registered in December 2006, the BCI declined by 10.9 index points to the current 92.6 in June 2008 - some ten points above the BCI for the period 2001 up to the middle of 2003 when the BCI remained relatively flat. The average for the SACCI BCI in the first half of 2008 is 93.4 compared to the average of 100.5 in the first half of 2007. Given the intensity of the adjustments and adverse prevailing economic conditions, SACCI believes that business confidence will remain under pressure over the medium term.

The political turmoil in Zimbabwe and the poor response it has elicited from certain African quarters has lead to negative sentiment towards Southern Africa. This accordingly weighs negatively on business confidence in South Africa. The global economic slowdown, which in some countries and for certain kinds of economic activity has been described in recessionary terms, creates a sentiment that bears upon the already tough local economic conditions.

The prevailing short-term economic and financial disequilibrium receives much attention, but SACCI is concerned that the required policy tightening will bring considerable distress over the medium term, especially to small and medium sized businesses.

There has been an improvement on the monetary balancing act, but other adjustments that have taken place together with the serious imbalance reflected by the current account deficit that stands at 7.7% of GDP pose risk factors.

South Africa’s most urgent economic corrections are of a short-term, cyclical nature and have financial dimensions that are having an immediate, detrimental effect on real macroeconomic equilibrium. The political turmoil and uncertainty affecting Southern Africa need an urgent response before the impact on business confidence starts to particularly affect the small to medium sized business sector in ways that might not be retractable.

Quick Polls

QUESTION

How confident are you that insurers treat policyholders fairly, according to the Treating Customers Fairly (TCF) principles?

ANSWER

Very confident, insurers prioritise fair treatment
Somewhat confident, but improvements are needed
Not confident, there are significant issues with fair treatment
fanews magazine
FAnews June 2024 Get the latest issue of FAnews

This month's headlines

Understanding prescription in claims for professional negligence
Climate change… the single biggest risk facing insurers
Insuring the unpredictable: 2024 global election risks
Financial advice crucial as clients’ Life policy premiums rise sharply
Guiding clients through the Two-Pot Retirement System
There is diversification, and true diversification – choose wisely
Decoding the shift in investment patterns
Subscribe now