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Corporate Confidence, But Not in Building
| News by Staff ReporterBusiness confidence increased from 44 to 55 points in Q1 2011, but confidence in the building sector continues to fall
Business confidence in SA increased 11 points to 55 in the first quarter of 2011, finding positive territory for the first time in three years.This is according to the Rand Merchant Bank (RBM) and the Bureau for Economic Research (BER) Business Confidence Index (BCI) which was released yesterday.
“The RMB/BER Business Confidence Index jumped from 44 points in the fourth quarter of 2010 to 55 in the first quarter of 2011,” said a statement by RMB/BER.
Chief economist at RMB Ettienne Le Roux said the figures were encouraging because persistent bottlenecks continued to constrain fixed investment by the public sector.
The BCI measures how people in a certain industry perceive the prevailing economic conditions.
A rating of zero on the BCI means that all respondents rated prevailing conditions as unsatisfactory and vice versa for a rating of 100.
According to RMB/BER when the BCI reflects a figure of above 50 it means that more respondents felt positive about business conditions in the near future than those who felt negative.
It has been three years since RMB/BER has recorded a figure of over 50 on the BCI.
RMB/BER said the index comprises five sectors, namely the motor trade, wholesale trade, manufacturing, retail and building sectors.
The motor trade, wholesale trade and manufacturing sectors all recorded an increase on the BCI while the retail and building sectors were down in the first quarter of 2011.
Figures
Motor trade sector – 84 points. This is the highest rating this sector has had in five years and is also the most successful sector among the five. The increase in business confidence in the motor trade sector is a surprise as the new carbon emissions tax introduced late last year has depressed the market.
Wholesale sector – 65 points. This sector has seen significant improvement since last year, increasing by around 15 points.
Manufacturing sector – 51 points. Manufacturing has increased by ten points sine the previous quarter to put it in positive territory.
Retail sector – 58 points. This is still a relatively high figure, considering the low point in mid-2009 of 35 points.
Building sector – 18 points. This is the only sector showing virtually no sign of recovery and is down two points from the previous quarter’s level of 20. Business confidence in this sector is now at its lowest level in ten years.
Source: www.bizpremises.co.za
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