ECONOMY
Business confidence stable
Posted Wed, 07 Dec 2005
The Business Confidence Index (BCI) was reflecting a stable business mood, having fluctuated by 0.6 index points over the past four months, the SA Chamber of Business (Sacob) said on Tuesday.
"The advantageous financial environment that gave rise to the
higher level of business confidence is still in support of the
business mood, but seems to have reached its limits," Sacob
economist Richard Downing said in a statement.
The BCI for November was at 126.5 index points, up from 126 in
October.
Downing said the public sector needed to invest more money in
order to gear up for a sustainable six percent economic growth rate
and raise business confidence to more advanced levels.
"Bottlenecks are already emerging in public services and at the
current growth rate of around five percent, with capital stock — a
country's asset base, including roads, rolling stock and power
stations — that cannot accommodate such a growth rate, we can
expect such disruptions
to increase," Downing said.
He expressed concern that with ailing levels of capital stock
the country's infrastructure could deteriorate faster than was
normal if the situation was not given urgent attention.
He said disruptions in services, such as the recent power
outages in Cape Town, were "definitely not" contributing to the
efficiency of business, also given that South Africa was competing
in international markets.
"Business should have an environment that is reasonable,"
Downing said.
It was comforting to see that manufacturing output experienced
increasing growth throughout 2005. General government services,
electricity and water provision registered a low growth during this
period.
The chamber urged policy decisions to be based on the extent to
which they contribute to efficient service delivery, the success of
business, improved returns for investors, economic growth and
poverty alleviation.
The BCI is calculated from movements in 13
sub-indices which
include vehicle sales, real retail sales and building activity,
exports, imports and inflation.
In September last year, the BCI, aided by low inflation, the
rand's strength and a surge in consumer spending, reached a record
level of 130.9 index points. The BCI for September 2005 was 125.9.
Sapa
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