Business confidence at 4-yr low

By Staff Writer

From Fin24, January 09 2008 

The Business Confidence Index, compiled on a monthly basis by the chamber of commerce and industry (SACCI), dropped back to 94.8 points in December from 95.8 points in November 2007, according to a statement.

"The BCI for December 2007 came in at ... the lowest level for the BCI since November 2003 and yet another new low for 2007," the statement added.

Richard Downing, the chamber's resident economist, said the survey had not factored in the result of an ANC leadership contest in mid-December when Jacob Zuma toppled South African President Thabo Mbeki as head of the ruling party but said the change would further impact on confidence.

"We foresee that 2008 will be economically more difficult than 2007... the business mood will be affected accordingly and the SACCI BCI is likely to continue to moderate in 2008," Downing told AFP.

"In addition, the change in leadership in the ruling political party and the possible policy adjustments could have important economic consequences and effects on business confidence," Downing said.

Zuma was elected with the backing of left-wing allies such as the main Cosatu labour federation in a result that was seen as a rejection by the party of Mbeki's pro-business policies.

Although the high price of precious metals and more a stable rand had assisted exports and manufacturing output in December 2007, trade, residential construction, and import volumes declined substantially, inflation moved higher, while the stock market lacked direction, added Downing.

He said expectations of a rise in inflation, slower growth and fears over crime were listed by businesses as their main concerns for the year ahead.

 

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