Adverse economic developments saw the SA Chamber of Commerce and Industry’s (Sacci) business confidence index (BCI) remain subdued in June.<\/p>\n
The index lingered below 90 points, at 89.7 in June compared to 88.9 points in May, and 0.5 points higher than May 2013, CEO Neren Rau said in a statement on Tuesday.<\/p>\n
“The average for the BCI for the first half of 2014 was 91.1 compared to 91.7 for the first half of 2013.”<\/p>\n
The negative annual changes year-on-year in the BCI grew as 11 of the 13 BCI sub-indices were in negative territory in June 2014, compared to eight in May 2014.<\/p>\n
“Only share prices and municipal services showed positive levels compared to last year,” Rau said.<\/p>\n
“Of the six financial sub-indices, only one (the all-share price index of the JSE) made a positive contribution to the BCI relative to June 2013.”<\/p>\n
The monetary\/financial situation had a notable negative impact on the business mood in June.<\/p>\n
“Inflation was at its highest since July 2009 when CPI [consumer price index] inflation measured 6.7% compared to 6.6% in June 2014,” he said.<\/p>\n
“The rand depreciated by 10.5% [year-on-year] against a weighted British pound, the US dollar and the euro, while the volume of borrowing by households has declined by 1.3% [year-on-year].”<\/p>\n
Gold and platinum prices were lower than a year ago, while real financing costs were higher, with a less supportive financial climate for business confidence prevalent in June.<\/p>\n
The chamber was concerned that strikes in certain sectors of the economy were having a lasting impact not only on business confidence, but on investor confidence and financial stability.<\/p>\n
Rau said the Standard and Poor’s rating agency downgrade of South Africa on June 13 was mainly due to the platinum strike, with cautionary notices in place in respect of the metal workers’ strike.<\/p>\n
“Sacci hopes that the current round of labour protest activity will be of short duration so as limit the adverse impact on an already fragile economy,” Rau said.<\/p>\n
Small Businesses Ministry: what to expect<\/strong><\/a><\/p>\n