The RMB/BER Business Confidence Index , a widely watched measure of business and, by extension, investor confidence, fell to 39 in Q3 from 42 in Q2. That extends its recent decline – in the second quarter it dropped to 42 from 46.
At 39 out of 100, the BCI signals that 61% of respondents are unsatisfied with prevailing business conditions, and who can blame them? Rolling blackouts continue apace, inflation has been surging and the economy contracted in the previous quarter, bringing national output back below pre-pandemic levels. Meanwhile, interest rates are on the rise, global economic growth is slowing and the state is still withering away under ANC rule, which is ham-fisted at best and downright predatory at worst.
Still, RMB cautioned that “all is not lost … While on the face of it, this is a disappointing outcome, the underlying picture is not as bad as the lower BCI implies”.“Confidence among retailers and wholesalers remains well above long-term averages, which speaks to the surprising resilience of consumer spending, this at a time when falling inflation in due course should ease the pressure on disposable income.
RMB also cautioned that faltering business confidence in Q3 does not necessarily point “to another outright contraction in real GDP”. That would give rise to the r-word – recession – and the scant data out so far for this quarter, such as the Absa Purchasing Managers’ Index , suggests a tentative rebound.Having said that, the fall of business confidence from an already low level surely suggests that a recession remains a possibility. But it is hardly an inspiring sign or a green shoot.
RMB, with respect, a lot has been lost already, never to be recovered. ZA is going to be limping for a decade or two. Any wasteful & fruitless use of the public purse will scupper any plan by GovernmentZA to do what it must, & not leave it all to private investment. It’s now!
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