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Business confidence continues to ebb as a struggling economy takes its toll

by , 26 November 2015

Earlier today saw the release of the RMB/BER business confidence index. The data showed that business confidence is continuing to fall.

So what is putting pressure on business confidence?

Let's take a closer look…


The business confidence index falls to 36

 
Business confidence has hit 36 for the last quarter of the year, reports Fin24. This after the index fell “from 42 to 38 in the third quarter”.
 
For the last year, the business confidence index has fallen 15 points taking it to its worst level in five years, adds Fin24.
 
The index sponsored by Rand Merchant Bank with data put together by the Bureau for Economic Research shows that economic growth in South Africa continues to struggle, says IOL. Ettienne Le Roux, the chief economist at RMB, says it looks like growth will come in at around 1% to 1.5% this year and it’s looking a similar story for next year.
 

Business confidence data shows three out of five key sectors are struggling

 
In situations like this when business confidence is falling, it “suggests lower investments and job creation by the private sector,” notes BDLive. The data showed of the five sectors included in the index, confidence fell “among new vehicle dealers, building contractors and wholesalers”.
 
The other two sectors showed that confidence in manufacturing remains unchanged “as production growth continues to track sideways at weak levels,” and retailers’ confidence did rise, “but remains at low levels,” adds BDLive.
 
Mr Le Roux said that retailers aren’t passing on price increases to consumers so they can “sustain moderate sales growth,” says Fin24. A sure “sign of weakness”.
 
So yet another sign that South Africa’s economy is struggling.
 
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Business confidence continues to ebb as a struggling economy takes its toll
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