Advertise with fastmoving.co.za
 
 

SA’s battered economy will come under further strain as business confidence reached its lowest level in a year.
SA’s battered economy will come under further strain as business confidence reached its lowest level in a year.

Low business confidence bodes ill for SA

ECONOMIC NEWS

By Sunita Menon - Sep 18th, 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 

Related News

SA retail sales jump as spending on consumer goods rises
19/10/2018 - 14:31
South Africa’s retail sales rose in August as household goods, clothing and cosmetics grew, data showed on Wednesday, with recovering consumer spending a sign the economy is climbing out of a recession that has piled pressure on President Cyril Ramaphosa.

Retail sector shows a glimmer of growth
17/10/2018 - 13:32
Retailers surprised economists in August, with annual sales growth of 2.5% — far higher than the consensus 0.3%.

How poor customer service impacts the retail customer experience
17/10/2018 - 09:31
Picture the situation: you're on the phone with customer support. You speak to a representative who can't help you. Your call gets forwarded to another agent. So you start your story over from the beginning and explain what you need to get out of the call. They can begin a process but will really need another team to jump in to complete. Another agent takes up your case and again you explain your situation as well as a summary of the two previous calls.

SA Citrus exports close in on 2 million tons
16/10/2018 - 15:07
Yet another important milestone has been reached by the South African citrus industry. According to Justin Chadwick, CEO of the Citrus Growers’ Association, citrus production has reached a record volume packed for export in 2018.

Benefits of working with influencers for your startup
16/10/2018 - 14:20
Considering the growth in popular social media personalities, many brands have seen powerful results when working with these personalities to market their products or services online.