Business confidence remains at low levels
by Staff Writer,
2016-03-09 12:32:29.0
BUSINESS confidence is stable but remains at low levels this quarter, a key survey showed on Wednesday.
The Rand Merchant Bank/Bureau for Economic Research (RMB/BER) business confidence index (BCI) is unchanged at 36 this quarter (January to March), indicating that about two-thirds of the 1,750 respondents surveyed remained unsatisfied with business conditions early in the year.
Lacklustre business confidence means companies will keep investments low, which negatively affects job creation.
"Essentially, the latest survey results would seem to suggest that the stagflationary trend of last year is intensifying," RMB chief economist Ettienne Le Roux said. Stagflation is an environment of high inflation and low economic growth.
He said the weakness in some sectors could point to further weakness in economic growth.
Sentiment recovered, although only marginally, in four of the five sectors that were surveyed. The sectors are retail, wholesale, building, new vehicle dealers and manufacturing.
Confidence among manufacturers collapsed to levels last seen during the 2009 recession amid weak production volumes, a noticeable drop in domestic sales volumes and even more depressed profitability levels.
The longer-term trend was of more concern, RMB said. Confidence has been deteriorating across all sectors for some time and in certain cases quite sharply.
Growth in retail sales volumes remained sluggish, while sales volumes in the wholesale trade sector grew at a slower pace in this quarter. Confidence in both sectors increased only because of "an unprecedented and widespread rise" in selling prices which lifted turnover, Mr le Roux said.
Rand Merchant Bank. Picture: MARTIN RHODES
BUSINESS confidence is stable but remains at low levels this quarter, a key survey showed on Wednesday.
The Rand Merchant Bank/Bureau for Economic Research (RMB/BER) business confidence index (BCI) is unchanged at 36 this quarter (January to March), indicating that about two-thirds of the 1,750 respondents surveyed remained unsatisfied with business conditions early in the year.
Lacklustre business confidence means companies will keep investments low, which negatively affects job creation.
"Essentially, the latest survey results would seem to suggest that the stagflationary trend of last year is intensifying," RMB chief economist Ettienne Le Roux said. Stagflation is an environment of high inflation and low economic growth.
He said the weakness in some sectors could point to further weakness in economic growth.
Sentiment recovered, although only marginally, in four of the five sectors that were surveyed. The sectors are retail, wholesale, building, new vehicle dealers and manufacturing.
Confidence among manufacturers collapsed to levels last seen during the 2009 recession amid weak production volumes, a noticeable drop in domestic sales volumes and even more depressed profitability levels.
The longer-term trend was of more concern, RMB said. Confidence has been deteriorating across all sectors for some time and in certain cases quite sharply.
Growth in retail sales volumes remained sluggish, while sales volumes in the wholesale trade sector grew at a slower pace in this quarter. Confidence in both sectors increased only because of "an unprecedented and widespread rise" in selling prices which lifted turnover, Mr le Roux said.
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