Low business confidence bodes ill for SA
By Sunita Menon - Sep 18th 2018, 14:33
SA’s battered economy will come under further strain as business confidence reached its lowest level in a year.
The SA Chamber of Commerce and Industry’s (Sacci’s) business confidence index fell in August on the back of a decline in merchandise export volumes, a weaker rand and higher inflation. The rand has weakened 20% against the dollar since the start of the year, while inflation stands at 5.1%.
Business confidence raced to a two-and-a-half-year high in January after Cyril Ramaphosa’s election as president of the ANC in December as business expected greater policy certainty. The sentiment has since faded after data last week showed that SA plunged into a recession for the first time since the global financial crisis.
This also comes as the ANC pushes to change the constitution to make it easier to expropriate land without paying for it.
Depressed business confidence does not bode well for the economy, which has already come under immense pressure. Low confidence constrains spending and investment, which results in shortfalls in government revenues and can lead to tax hikes and, a negative cycle of low confidence and low spending, according to analysts.
"The positive mood that prevailed at the beginning of 2018 has been overtaken by uncertainty and events that weigh on the economic prospects for SA. This also taints SA as a sought-after investment destination," said Sacci.
The index, which measures business activity, dropped by 4.2 index points in August to 90.5, compared to 94.7 in July.
While seasonally adjusted retail trade sales increased by 1.3% in July, according to data from Stats SA, consumer spend is running out of steam. This is likely due to the additional strain of a VAT hike and higher transport costs, said Jason Muscat, a senior economic analyst at FNB.Business Live
Technology is fundamentally altering the relationship between brands and consumers
15/07/2019 - 16:44
Both businesses and societies that have accelerated their digital transformation efforts have been rewarded with faster growth. In fact, digital transformation has the potential to unlock the value of about R5-trillion across multiple industries in the next decade, potentially moving the needle of economic growth in SA. So said Wayne Hull, MD of Accenture Digital, at the annual IAB Summit earlier this year.
Woolies, Anglo, Sappi stock in demand
15/07/2019 - 16:26
Woolworths Holdings' (Woolies') share price gained a solid 12.8 percent last week after it announced a turnaround at its fashion, beauty and home business this year. The group, one of many local retailers to struggle in Australia and which also trades in 11 countries in sub-Saharan Africa, still relies on its home market for 71 percent of operating profit.
Cape Town vs Johannesburg- where are retailers really winning?
15/07/2019 - 16:11
New global research by Vend, a cloud-based retail software platform for independent retailers, has found that Cape Town independent stores enjoy average transaction values up to 49% higher than retailers in Johannesburg.
Walmart must hire someone who can stop the bleeding at its online business
15/07/2019 - 09:55
Walmart has a hole to fill at its online unit, and whoever assumes the role faces a big challenge ahead.
Poultry body defends call for 82% chicken tariffs
12/07/2019 - 08:50
The South African Poultry Association (Sapa) has defended its decision to call for a hike in chicken imports tariffs to 82 percent, up from the current 37 percent.