adminJohannesburg. – BUSINESS confidence recovered last month as economic activity improved after workers that were on strike in the steel and engineering sectors returned to work.The South African Chamber of Commerce and Industry’s business confidence index rose 1,1 index points to 89 last month, supported by an improvement in six of the 13 subindices of the BCI, including the rand exchange rate, precious metal prices, imports, and construction.
“Lower inflation, a stronger rand, improving international trade and less disruptions of the economy by exogenous factors than earlier in the year could positively influence business confidence towards year-end,” Sacci said.
The chamber said that important subindices such as manufacturing output, import volumes and building activity turned from negative to positive but “within the context of a volatile BCI”.
The August 2014 BCI reading of 89 was 1,5 points below the August 2013 level.
Sacci said the lower level of business confidence as compared to a year ago was mainly caused by “restrained real activity”.
The chamber said modest economic growth in the euro area and instability in the Middle East would weigh on the economic growth prospects for South Africa.
It said, however, that there were also “glimmers of hope” that could support economic growth, including lower oil prices and moderating inflation.
“South Africa’s biggest challenge is to accelerate the pace of economic growth. For this purpose, sound institutions and a relatively stable and predictable policy and investment environment are imperatives,” Sacci said. – Bdlive.
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