Business confidence up in February

Business confidence recovered marginally in February rising to 99.5 index points, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.

Sacci’s monthly Business Confidence Index (BCI) increased by 2.4 index points to 99.5, the best level since June 2011 even though its 2.4 points below the level of February 2011.

Four of the 13 sub-indices were negative in February. Of the six financial sub-indices, five were positive on a month-to-month basis compared to only two in January.

“On balance, the sub-indices on real economic activity also induced a positive effect on the BCI between January 2012 and February 2012. The annualised impact of the real economy was more positive in February than in January 2012 with six of the seven sub-indices reflecting improved performance,” noted Sacci on Wednesday.

The chamber noted that although more-year-on-year changes were positive, the rate of improvement was still lagging the long-term performance trend of the economy.

“Business confidence is still failing to identify real positive economic momentum,” said Sacci adding that the horizontal movement in business confidence although erratic indicated that there is room for improvement in business activity notwithstanding trying times in the Eurozone and the US among other things.

“From a confidence perspective, the real economy showed an improvement in February compared to a year ago while the financial environment remained neutral towards business confidence,” said Sacci.

Sacci said the continued labour protests and rising cost of fuel remain constraining factors on business optimism.