Business confidence index almost unchanged

The Business Confidence Index (BCI) remained almost unchanged for the third consecutive month at 93,9 in March, the South African Chamber of Commerce and Industry (SACCI) said today. This was marginally down from 94,0 in February, but slightly higher than the 93,8 measured in January.

The average for the SACCI BCI in the first quarter of 2008 was 93,9, compared to the average of 100,5 in the first quarter of 2007. The third quarter of 2003 was the previous worst quarterly reading for the BCI with an average of 86,8. Positive elements for the BCI in March 2008 came from the sub-indices of merchandise import and export volumes; share prices; the volume of building plans passed and lower real financing costs.

Negative aspects included the rand exchange rate, inflation and real credit extension. Retail trade and vehicle sales remained under strain. "Given the present uneasy global economic climate, uncertainty in the global financial system and lower local and global economic growth prospects, the BCI remains stationary," the SACCI said.

"The local business climate is confronted by infrastructure bottlenecks including an inconsistent electricity supply that will constrain economic expansion." Business confidence was at a stage where it could change for the better or worse and economic policy issues therefore should be approached with caution, the SACCI said. - Sapa