Business Confidence falls to 12-year low

In July, the BCI declined by four index points.

"After the BCI bounced back by 2.1 points from the 92.8 in May 2012 to 94.9 in June, the BCI declined by four index points to 90.9 in July 2012. The July reading for the BCI is a 12-year low and is down more than 8 points on a year ago.

"The latest move in the BCI indicates that business confidence remains highly fragile and unpredictable," said Saaci.

Business confidence continued to be vulnerable to negative influences from the domestic and international environment.

Sacci noted that the short term monthly improvements in June were largely reversed in July, with four of the seven sub-indices for the real economy being less favourable than in June.

Where eight of the 13 sub-indices of the BCI were positive on a monthly basis in June, only three sub-indices were positive in July 2012 with four indices being neutral. The majority of the sub-indices in the financial environment were neutral, while the sub-indices in the real economy were largely negative on a month-on-month basis.

"Sacci noticed with concern the slowdown of economic growth on a global scale and the widespread downward revision of expected growth rates for South Africa. This is especially concerning when the effect this will have on trade and the current account of the balance of payments is considered. Foreign trade remains a key contributor in supporting and nurturing local business confidence," said Sacci.