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The SACCI Business Confidence Index (BCI) for November 2010 was released today at a Press Conference at the SACCI Offices in Rosebank, Johannesburg.

The SACCI Business Confidence Index (BCI) moved ahead by 1.1 points to 87 in November 2010 after retreating to 85.9 in October 2010. Seven BCI sub-indices were positive in November 2010 on a month-on-month comparison with October 2010, four were negative and two remained virtually unchanged. The index appears to have established itself around the 87 level and will remain in positive territory when compared year-on-year.

Five of the seven sub-indices on physical (real) economic activity had a negative impact on the BCI in November 2010 on an annual basis. Four of the six sub-indices reflecting on the ‘financial’ environment were positive on an annual basis and may positively impact the real economy and accordingly the relevant BCI real sector sub-indices in the medium term.

Three significant developments in the course of November 2010 had an important bearing on economic prospects for the South African economy. The Ireland debt situation reaffirmed the possibility of problems in Portugal and Spain. Therefore the economic recovery of Europe might again be slowed down or even be in jeopardy. Domestically the continued lowering of the repo rate and the growth enhancement plan could also have important implications for business and the economy.

Business is fully cognisant of the significance of economic growth and job creation in the RSA but is of the view that the focus of effort should directed at an enabling business environment. Business is sceptical of a more centralist planning approach that may be implied to meet these growth targets. A stronger interventionist approach in addressing national economic challenges will have serious consequences for the functioning of the RSA economy, adversely affect investor and business confidence and compromise the economy’s ability to create sustainable jobs.

Despite the recent lowering of the repo rate, the real prime overdraft rate has been on the increase since June 2008. . Over this period, household debt to disposable income remained high and real consumption expenditure by households remained under pressure, as increases in the tariffs of local government public utilities further placed a lid on any intended relief from lower interest rates.