Business climate in South Africa worsened slightly last month, as the Business Confidence Index (BCI), produced by the South African Chamber of Commerce and Industry (SACCI), fell to 91.1 points from 91.4 points in September. Compared to October 2012, the index was by 0.9 points lower. The BCI is significantly below its all-time high of 122.1 in December 2006, and is also below the average of 100 for the base year 2010. SACCI noted that the ongoing labour disputes and accompanying work stoppages, as well as the risks for South Africa’s sovereign ratings contributed to the economy not gaining pace despite improvement in some domestic and global economic indicators.
Four of the index’s 13 sub-indices improved in October as compared to September, three worsened and six were unchanged. On a y/y basis, 7 sub-indices made negative contributions to the BCI and 6 made positive contributions.
SACCI said that the business climate continues to be tainted by the threat of strikes while the political campaign for the 2014 general elections started. It concluded that unworkable policy stances and unattainable promises contribute to a wait-and-see approach and that the postponement of decisions after the general elections in 2014 will limit economic prospects and may contribute to missed opportunities or break in investor confidence.
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