CAPE TOWN: Business confidence remained subdued last month, two separate indices showed on Wednesday, pointing to the damaging effects of weak gross domestic product (GDP) growth, a slow recovery in demand and disruptions from power cuts.
The South African Chamber of Commerce and Industry’s (Sacci) business confidence index (BCI) plummeted to a 16-year low last month while Markit/HSBC’s whole economy purchasing managers’ index (PMI) also fell.
The PMI is the more important of the two indices as it is an actual survey of 400 executives at private-sector companies while the BCI tracks the performance of economic indicators such as the rand, inflation, and exports on a monthly basis.
The PMI fell from 51.5 in April to 50.1 last month — the lowest reading in three months. Despite the decline, the fact that the index remained above 50 indicated that South African private-sector companies were still optimistic about operating conditions, but slightly less so than they were in April.
