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The SACCI Business Confidence Index (BCI) for January 2014 was released today at the SACCI Offices in Rosebank, Johannesburg.

The SACCI Business Confidence Index (BCI) receded to 90.5 in January 2014 from 91.9 in December 2013. Between December 2013 and January 2014, five sub-indices turned positive, three remaineCheck out "Lily Allen - Fuck you (official)" on Vimeod roughly unchanged, and five were negative.

The BCI was 3.5 index points below the January 2013 level. The January 2014 reading is the lowest for the BCI since August 2013 and compares unfavourably with the level of 100 for the 2010 base year and the 100.7 for the BCI at the trough of the current business cycle in September 2009.

It concerns SACCI that on a year-on-year basis, only two sub-indices made positive contributions to the BCI, ten had a negative impact and one was neutral. A major activity like exports continued to improve while municipal services made a minor contribution to the January 2014 BCI, with the latter coming off a low base. The year-on-year decline in business confidence bodes poorly for growth, employment and the capacity to address vulnerabilities in the economy.

January 2014 was characterized by important developments in the global and domestic financial sphere. The tapering of the monetary stimulus in the USA has sent ripples through global financial markets and impacted the international flow of funds. This had serious effects on the exchange rates of emerging markets in particular.

SACCI encourages policy makers to be prepared if a significant tightening of global financing conditions continues. In response to subdued economic growth, South Africa must pay urgent attention to facilitating fixed investment. South Africa’s immediate vulnerabilities, the deficit on the current account, the quality of capital inflows (mostly portfolio) that expose the rand to severe pressure and the size of budget deficit, are risk elements that demand ongoing attention.

South Africa’s competitive position amongst other emerging markets is not favourable. It is clear that South Africa’s rand is regarded as quite vulnerable in relation to other emerging market currencies and it ranks at the lower end of its peer group. South Africa’s budget and current account deficits as a percentage of GDP, is the second highest at 11.3% - second only to Egypt at 16.2% of GDP.

Despite the current weak economic performance SACCI is of the opinion that disciplined policy responses will bear positive results over the medium to long-term.

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