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Corporate and Investment Bank
Standard Bank Group
11 July 2018

Confidence slips further

Shireen Darmalingam

  • The SACCI business confidence index in May slipped to 94 pts, from 96 pts in April. In June, there was further slippage, to 93.7 pts, a fifth month of sliding,  and also from a two-year high in January.
  • SACCI said that the weaker rand of the past few months, disappointing domestic growth as well as the global trade war constrained confidence in June. SACCI highlighted employment as a further threat to confidence ahead. Seven of the 13 sub-indices declined month-on-month in June. It therefore has become “increasingly important that the structural concerns hampering economic growth be addressed with economic rationality”. Furthermore, SACCI said that “uncertainties surrounding economic policy direction and positions should be clarified so that investor and business confidence can be reaffirmed”.
  • The optimism prevalent at the beginning of the year has now faded, and consensus forecasts for growth have been cut back.
  • We still see 1.7% as reasonable for 2018, supported by the relatively resilient signals from our econometric business cycle model. Nevertheless, the risks are on the downside (see Some rand and bond gains of 9 July 2018, by Elna Moolman).

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