Business confidence – it’s all relative

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Business confidence in SA declined for the fifth month in a row, reflecting a tentative economic outlook, lower global growth and financial instability in Europe, the South African Chamber of Commerce and Industry (SACCI) said on Wednesday.

Its business confidence index (BCI) declined to 97,4 in November from 97,5 in October, implying that “downward momentum” in business confidence may have stabilised at low levels.

“The financial environment was stable … but the depreciation of the rand and inflation will have negative impact on business confidence,” SACCI said.

“Subdued economic activity is expected to continue in the fourth quarter of 2011 and well into 2012.”

Many economists believe growth in the economy will slow next year, eroded in part by the deepening crisis in Europe, SA’s main trade partner.

SA’s image as a prudently-managed economy was affected by the decision of Moody‘s Investor’s Service to change the outlook on its credit rating to negative from stable, SACCI said.

via BusinessDay – Business confidence down for the fifth month

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