Slight drop business confidence: Sacci

The October BCI dropped to 91.1 from 91.4 in September.

   

"This is only the second time in the last six months that the BCI was above 91 index points," Sacci said in a statement.

   

"The BCI averaged 91.4 in the first 10 months of 2013 compared to 94.4 for the corresponding period of 2012."

   

Although the October BCI could not break away from levels closer to 90, there was at least a possible improvement in business confidence from uninspiring local conditions.

   

Last month's BCI was 0.9 index points below the level of October last year but 8.9 index points below the 100 of the 2010 base year,  Sacci said.

  

"Sacci is concerned that the ongoing labour disputes and disruptions of business, as well as the risks to South Africa's sovereign ratings, are a continual weight on an already tentative business climate.

   

"Lingering economic challenges in some of the larger economies of the world also contributed to the tentative business climate resulting in low business and investor confidence," the organisation said.

   

Sacci said six sub-indices of the BCI did not change meaningfully between September and October. This reflected a tentative business mood.

   

Four sub-indices made positive contributions to the BCI on a month-on-month basis in October compared to six in September. 

   

Three sub-indices on real activity were negative on a month-on-month basis and burdened the index.

   

On a year-on-year basis, six sub-indices made positive contributions to the BCI. Seven had a negative impact with major activities like manufacturing output, retail sales and new vehicle sales contributing to the negative impacts on the BCI in October.

   

"The business climate continues to be tainted by the threat of strikes while the political campaign for the 2014 elections started," said Sacci.

   

"Unworkable policy stances and unattainable promises contribute to a wait-and-see approach and an impasse with regard to business decisions."

   

It said the postponement of decisions until after next year's elections would not only limit economic prospects but could contribute to missed opportunities or a break in investor confidence.

   

-Sapa