The RMB/BER Business Confidence Index (BCI) for the first quarter of 2014 came out today, and has fallen by two points, to an index reading of 41. This suggests that six out of 10 respondents are unhappy with prevailing business conditions. RMB’s chief economist Ettienne le Roux says business confidence has been in net negative territory for a year now. The survey was conducted between the 3rd of February and the 3rd of March and so the results do not reflect the impact of last week’s Eskom power cuts, which are likely to have further dented business confidence. There was some improvement in sentiment in the building and manufacturing sectors, but some negative responses elsewhere. “What stood out was the 14 index point drop in new vehicle dealer confidence,” said le Roux. “The index fell from 41 to a six-year low of 27, as a big deterioration in sales hit confidence in the first quarter.” There were also falls in confidence in the wider retail and wholesale sectors. “Slackening consumer spending stems mainly from lower income earners (those earning less than R7 000 pm), which have, relative to higher income earners, been affected proportionally more by employment cuts, loss of income due to labour strikes, the faster increase in the price of basic commodities (such as food and petrol), tighter credit standards for unsecured debt and the resultant bigger decline in their confidence,” said le Roux.
Tweets of the day:
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The QI Elves (@qikipedia): In ancient times cats were worshipped as gods; they have not forgotten this. TERRY PRATCHETT