The organisation’s business confidence index fell by 3.4 points in July – its largest month-on-month decline since October 2009.
While the index’s average reading for the first seven months of 2011 is 4.1 points higher than the equivalent period in 2010, SACCI noted that business confidence was continuing its “downward trend” since the start of the year.
Analysis of year-on-year data also indicated that the economic upswing was “faltering”, it said. Five of the 13 economic sectors measured – utility services, manufacturing, imports, retail sales and construction – were weaker than they were in July 2010.
Falling business confidence could reflect growing global concerns over public debt this year, said SACCI, in addition to weaker economic performance from developed and developing economies.
Domestic factors also had a negative impact, however. In particular, SACCI highlighted strike action in South Africa and said above-inflation wage demands were damaging job creation.
SACCI also warned that support from the Congress of South African Trade Unions for nationalisation could dampen investor enthusiasm for the country. “Both domestic as well as international investors are experiencing conflicting messages about South Africa’s commitment to doing business,” it said.
According to SACCI, it has a membership of about 20,000 businesses, including 80 of the largest corporations in South Africa. A PDF of the full report is available here.
