The SACCI Business Confidence Index (BCI) for January 2010 was released today.  The Business Confidence Index (BCI) of SACCI declined by 2.3 index points in January 2010 to 81.2. The BCI lost positive momentum over the festive season, but the setback may be temporary given improved prospects for recovery.

From December 2009 to January 2010, nine BCI sub-indices had a positive effect on the BCI. Although more sub-indices had a positive impact in January 2010 than in December 2010, the decline in the sub-indices of import and export merchandise volumes had a relatively greater impact on the BCI than the other sub-indices. This demonstrates the impact of international trade on the local business environment.

The low import volumes are also reflective of weak domestic demand conditions and a languid domestic economy. On a year-on-year basis six sub-indices had a positive impact on the BCI in January 2010, but the negative effect of the other seven sub-indices (mainly real economic activity), still caused the BCI to be 1.7 points lower than in January 2009.

SACCI noted that although the anticipated recovery will be protracted in advanced economies, activity in emerging and developing economies is expected to be generally robust. SACCI is concerned that the South African economy is yet to share in the vigorous economic recovery anticipated for key emerging market economies. The consequences of the recession may still pervade the domestic economy and contribute to the tentativeness in the business environment as well as in business confidence.

Economies globally are experiencing differing levels of confidence although they are broadly trending in a positive direction. It appears that the restoration of confidence is a key ingredient of the economic recovery. Opaque and incoherent policy signals would undermine local business confidence, investor confidence and the pace of economic recovery.

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Mr. Richard Downing SACCI Economist 082 822 5566
Mr. Neren Rau SACCI CEO 011 446 3800
Released by the SACCI, Johannesburg – 8 February 2010