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The SACCI Business Confidence Index (BCI) for August 2012 was released today at the SACCI Offices in Rosebank, Johannesburg.

The BCI bounced back by 4.1 index points from the 90.9 in July 2012 to 95.0 in August 2012 – after declining by 4.0 index points in July 2012 to 90.9. The BCI was 3.6 points below the August 2011 reading.

The recovery of the BCI in August 2012 was supported by a greater number of short-term improvements than in July 2012. Only four sub-indices were negative on a monthly basis compared to six in July 2012. On an annual basis, nine of the thirteen sub-indices improved and four were negative. The sub-indices representing the financial environment were balanced between being negative or positive on the business mood while the sub-indices for real economic activity were dominated by positive movements with only building construction contracting.

In August, the local business environment was dominated by the impact of the protest activity at the platinum mine in Marikana and the ensuing violence and intimidation. The improvement in business confidence during the month of August 2012, despite the events in the mining industry, is evidence of the resilience of South African businesses in a challenging environment.

The diversity of the South African economy renders it less vulnerable to specific events in any sector, for instance mining. SACCI therefore remains concerned that while the sector remains under severe operational and competitive pressures, mines are also burdened by the militant labour behavior that undermines the sector’s investment appeal.

The current state of industrial relations and the job creation challenges South Africa faces will be the theme of the SACCI Annual Convention on the 4th and 5th of October 2012. Senior political, business and labour leaders will discuss possible solutions to the labour market challenges at the Convention (see www.sacci.org.za/convention).

For a full background to this month’s SACCI BCI see the Economic Commentary in the BCI report on www.sacci.org.za.