Business confidence remained fragile and hit a new low last month, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.

The Sacci Business Confidence Index sank from 90,4 in May 2013 to 90,2 last month. In June 2012, the index was at 94,9.

The average for the index for the first six months of this year stood at 91,7, the lowest first-half average since 86,3 in 1999.

Sacci CEO Neren Rau said developments in the domestic economy still adversely affected business confidence.

Two sub-indices, manufacturing and construction, were positive in June. Exports, imports, and share prices changed to negative in June this year, from positive in May.
Manufacturing output, new vehicle sales, and building construction showed a positive year-on-year trend.

Rau said the chamber remained concerned about the domestic economy’s ability to contend with the prospect of higher inflation, further constraints on access to liquidity, and economic stagnancy in a number of sectors.

“The legacy of optimism and accomplishment of the early 1990s and the middle 2000s has in some instances given way to a lack of accountability and uncontrolled expenditure,” he said.

“Even the Reserve Bank is expected to enhance growth and further ease monetary policy with inflation on the verge of topping the upper target range of 6%. The consequence is that investors are uncertain about the domestic economic policy direction and its consistency.”

Sacci believed that sustainable economic growth was the only way to address certain socioeconomic problems. — Sapa