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In a statement issued today, the President of the South African Chamber of Commerce and Industry (SACCI), Mr Chose Choeu said:

The strong growth of the manufacturing sector, although not up to pre-crisis levels, is heartening. It is an indication that in this sector, growth might be on a more stable footing than before. However, the continued strong rand, price pressures, increased costs of doing business and continued economic turmoil in the euro area (our largest export market) have the potential to slow this growth going forward.

On the other hand, the poor performance of the construction sector which did not contribute to growth (0.0% growth) is an indication of the low levels of investment in the domestic economy. This is extenuated by the lack of significant public sector investment projects in spite of significant budgetary allocations for infrastructure development. This lack of investment is concerning as it constitutes a significant factor in the continued distress experienced by domestic firms.

The expectation of increased costs of capital through higher interest rates into 2012 will dampen the outlook as will the significantly higher than inflation wage demands currently being made by organised labour.