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11 August 2011 |
Confidence in the economy
among South African companies has become a “casualty” of the strike season and
global events, business leaders have said.
Business confidence fell
in July according to the South AfricanChamber of Commerce & Industry’s (SACCI) Business Confidence Index (BCI).
It dropped to 99 points in July down from 102.4 in June. A score below 100
indicates a contraction in confidence.
Released yesterday, the
chamber said the monthly index had deteriorated to its lowest level for 2011
and revealed the biggest fall since 2009.
With the global economy
broadly characterised by stagnation, business confidence will continue to be a
casualty with the consequence that positive employment prospects are further
delayed, it said.
The BCI, which is a
composite of 13 indicators such as retail sales and inflation, has been hit by
recent strike action. Last month a strike took place in the
petroleum sector over wages. Workers downed tools on 11 July, leading to fuel
shortages in provinces such as Gauteng and KwaZulu-Natal. At the end of July,
unions accepted a 8.5 per cent wage increase.
week, Rea Vaya bus drivers embarked on a week-long illegal strike leaving 35,000 daily
commuters stranded. They were protesting about
working shifts proposed by bus company PioTrans.
strike season is putting further pressure on an already embattled economy. Wage
demands in excess of prevailing inflation levels are impacting on the ability
of businesses to create employment and thereby contribute to poverty
reduction,” said SACCI.
It said that with crises
in Greece and the US dominating debate in July, excessive public spending has
to be rectified “to ensure fiscal and economic sustainability in the