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Business confidence edges slightly higher in July

by , 05 August 2015

Earlier today, the South African Chamber of Commerce and Industry (SACCI) released its business confidence data for July.

The business confidence index recovered from lows not seen since 1999.

So what's behind the small rise? And how can business confidence improve going forward?

Let's take a closer look…

Business confidence rose to 87.9

The business confidence index (BCI) came in at 87.9 for July, says MoneyWeb. This comes after the key indicator hit a 15 year low of 84.6 points in June.

One major factor is “slowing growth in China,” adds MoneyWeb. This makes SA more vulnerable as China is a “key importer of local commodities”.

The current level of business confidence indicates that businesses aren’t “significantly investing in the economy,” notes BDLive.

In spite of the 3.3 index point rise, the index didn’t “recover to above the medium-term downward trend of business confidence,” reports iAfrica. Yet looking at changes on a month-on-month basis, sub-indices “were more positive in July 2015 than in June 2015”.

Helping out business confidence last month was “lower inflation, excluding petrol, food and non-alcoholic beverages,” adds iAfrica.

During July, “exports, retail sales and construction were positive,” reports BDLive. Inflation, sales of vehicles and the exchange rate of the rand stayed the same. The chamber recorded drops in “municipal services, manufacturing, imports, share prices, real private sector borrowing, real financing cost and precious metal prices”.

Changes are needed to improve the economy and business confidence

The SACCI said South Africa needs to “reconsider its economic direction” if it wants to improve business confidence, says BDLive. The chamber says that “productive fixed investment, higher value added export volumes, productivity and work ethics” could help to fix the “current economic stalemate”.

The chamber added that the problems facing South Africa’s economy at the moment have “deeper underlying problems,” notes iAfrica.

So despite a rise in business confidence, it’s still not looking good. With the economy lagging, it appears that changes to policy could help out the current situation now and into the future.

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Business confidence edges slightly higher in July
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