File: The latest RMB/BER BCI data shows that retail confidence is at its lowest level in 20 years showing 83 percent of retailers were dissatisfied with current business conditions.CAPE TOWN – The materially higher tax burden on South Africans has been cited as one of the key factors behind the decline in the country’s business confidence index and a consumption-led recovery is not anticipated for South Africa.
The RMB/BER BCI reflects the results of a survey of 1 800 business people. The bulk of the responses were submitted between 14 August and 2 September, which was before the latest outbreak of xenophobic attacks. A year ago, confidence among wholesalers was still above 50. In the third quarter, however, it fell by a hefty 13 points to 29 - also a 20-year low. The growth in sales volumes, especially of non-consumer goods, plummeted.
Building confidence dropped from 30 to 23, thereby neutralising all the second quarter’s gains. Residential activity registered the biggest drop-off in ten years, while the weakness in non-residential activity persisted. Investec chief economist Annabel Bishop noted that retail confidence was at its lowest level in 20 years showing 83 percent of retailers were dissatisfied with current business conditions.
South Africa desperately needs to resolve this quicksand situation, said economists from PwC Strategy&.