The March Business Confidence Index (BCI) improved to its most impressive levels since September at 88.3 points, the South African Chamber of Commerce and Industry (SACCI) reported on Tuesday.
“The latest BCI figures are 5.1 index points better when compared with last year and is also at its best level since September 2008 when the BCI was standing at 89.9,” reported SACCI.
Just two of the seven real economic activity sub-indices ended up being positive – retail trade and building activity.
“The financial and economic environment continued to be conducive towards a optimistic business climate within the short-term. Threats towards the optimistic views within the financial environment include things like new risks in the global economy, commodity price movements in addition to geo-political lack of stability and uncertainty.”
Despite the fact that the BCI improved upon a year-to-year basis in March, South Africa’s general performance within the global trade environment could very well restrict advancements in business confidence in the event that global competitiveness conditions are not dealt with actively.
The contributions of the sub-indices when using an annualised basis ended up being evenly balanced for the reason that six sub-indices ended up being positive while six happen to be negative, at the same time one remained undecided.
“Concern adn uncertainty gripped the global economy along with stock markets combined with foreign currency markets responding nervously to the earthquake in Japan on 11 March 2011. Following on from the initial worry about the consequences associated with the crisis and catastophe in the world’s third largest economic system, the general opinion seems to be of the fact that longer-term implications of the catastrophe for the global economy and financial systems will likely be somewhat muted,” outlined SACCI.
It stated that the Japanese economy is going to take some time to recover as infrastructure repairs take place. The rate at which the damaged rail and road networks are repaired as well as at which corporate operations are actually restored is going to ascertain the pace of the Japanese recovery.
In addition, the political chaos and uncertainty in the Middle East and North Africa, which encompassed a lot more regions for the duration of March 2011, “is without a doubt of greater immediate concern because of the current as well as possible influence on the crude oil price along with the consequences for global inflation,” said SACCI.
“The domestic economy generally seems to have regained a bit of momentum in business confidence, having said that the index continues to be sensitive to domestic socio-economic developments. The conduct of the local government elections, the decisiveness with which corruption is tackled along with the level of labour dispute activity will likely be crucial determinants of whether the BCI breaches the significant level of 90.”