SA economy lacking 'vigorous' recovery

| Friday February 12, 2010 00:00

With the release of its January business confidence index (BCI), the chamber highlighted that activity in emerging and developing economies was expected to be generally robust, compared with advanced economies, which were expected to experience a protracted recovery.

The consequences of the recession may still pervade the domestic economy and contribute to the tentativeness in the business environment, as well as in business confidence,' Sacci noted in a statement.

It added that opaque and incoherent policy signals could undermine local business and investor confidence, with the restoration of confidence seemingly a key ingredient, globally, of any economic recovery.  Sacci noted that business confidence, locally, had lost some positive momentum over the festive season, with the Sacci business confidence index (BCI) having declined by 2,3 points in January to 81,2 points. However, it added that this 'setback' could be temporary.

Nine of the BCI subindices had shown positive improvements month-on-month, with only the import and export subindices negatively impacting on the BCI.

'This demonstrates the impact of international trade on the local business environment.  The low import volumes are also reflective of weak domestic demand conditions and a languid domestic economy,' the chamber statedOn a year-on-year basis, only six subindices had a positive impact on the BCI in January 2010.

The remaining seven subindices, which were mainly real economic activity indicators, had had a negative impact on the BCI, leading to a 1,7 point year-on-year decline in January.-(Engineeringnews)