Business confidence down

[Dave A]

South Africa's business confidence fell sharply to a seven-year low in the first quarter of 2008, as the sector fretted about an uncertain economic and political outlook, a survey released on Wednesday found.

The Business Confidence Index, sponsored by Rand Merchant (RMB) and the Bureau for Economic Research (BER), fell by 19 index points to 48.

"The sharp fall in business confidence ... reflects a deepening slowdown in business volumes, profitability coming under pressure, as well as increased economic and political certainty," the sponsors said in a statement.

The survey found that interest rates, tighter credit lending rules, an electricity shortage and higher inflation all affected business volumes.
full story from M&G here

I see they also make mention of political uncertainty...

[Karenwhe]

Without sounding too controversial , that is brilliant news.

Property finally reached a point were investors can find good deals, often, and the costs of overnight holding on a "short" are much better .

Also one of the economists I think of FNB said that petrol prices are still to go up, which is another bonus.

It has never been a better time to invest with the simple principle - buy low, sell high. The secret = now it is low.

I can also smell some consolidations in the markets, it always goes like that..... when down.... the companies that did well and prepared well, buy other companies in "low" times for cheap and capitalize.

Which reminds me that AOL is buying BEBO for $850 million. It remains to be seen if this was a good move.... or not.

Everyone should start to look around, the opportunities are just getting bigger by the day.

[Dave A]

I tend to agree - these "corrections" definitely present opportunities.

I know on our electrical coc and entomological clearance side of the business, if property prices come down a bit, volume will start to move. It's a bit like waiting for the inevitable, and the lean times thin out the crowd for when the volume trend turns.

[Moneymaker]

When time become bad as part of a cycle then that is a good thing for investors.....but in-so-much as a stock market share might oscilate between the support and resistance price levels, so too might the SA economy drop below the support level which will serve as a resistance level in future......So one has to acknowledge that these measurements are relative....

[finvik]

it is indeed a good time for investors. Foreigners invested R3.8 billion directly into the economy in the first quarter, part of which were repayments of loans made by offshore parent companies
Direct investment is one of three categories of offshore funding. The others are portfolio and the category described as "other", which consists of loans made to local companies by third parties, as opposed to loans from a parent company.

vik

[Dave A]

Third quarter figures now - and I think we can officially say there is a problem

Having fallen by a massive 22 index points over the first half of 2008, the RMB/BER business confidence index declined by a further 11 points during the third quarter.

The third quarter reading of 34 meant that only a third of respondents were satisfied with prevailing business conditions, compared to four-fifths a year ago, economists at Rand Merchant Bank said on Wednesday.

The third quarter survey was conducted between August 4 and September 2.

Whereas business confidence had declined in only two of the five sectors covered during the second quarter survey, it declined in all five sectors during the third quarter.

The largest fall occurred in new vehicle trade, where confidence fell by 23 index points. Confidence now stood at 15 -- a nine year low -- compared with 38 the quarter before.

The second biggest fall occurred in the wholesale sector. Wholesalers' confidence dropped by 18 index points, from 51 during the second quarter.

According to the survey, manufacturers' confidence fell further from 37 to 30, the lowest level since the third quarter of 1999 when the 1997/1999 business cycle downswing ended.

The persistent decline in business confidence was another indication that the second quarter rebound in GDP growth was a mere technical recovery following the impact electricity outages had on the mining and manufacturing sector during the first quarter, Rand Merchant Bank said.

The large third quarter drop in confidence indicated that the underlying economic slowdown had become even more marked.
full story from M&G here

Quite simply, there's a heck of a lot more unhappy business folk out there at the moment.