South African business confidence fell to the lowest level in more than three years in April as weak consumer spending curbed demand in Africa’s biggest economy.
The business confidence index fell to 94.3 from 95.7 in March, the Johannesburg-based South African Chamber of Commerce and Industry said in an e-mailed statement today. The index is compiled from 13 economic indicators, including retail sales, inflation and financial gauges, such as a stock-market index and currency.
“Households’ income statements and balance sheets remain weak,” Sacci said. “With high and rising unemployment and available household resources under stress, the expectation that household consumption expenditure should spark the economic recovery grows weaker.”
South African economic growth will probably slow to 2.7 percent this year from 3.1 percent in 2011 as a recession in Europe curbs demand for exports, according to government forecasts. The economic recovery is further at risk from rising oil prices, an appreciation of the rand this year and inflation pressures, Governor Gill Marcus said on March 29.
Lending remains “risk-averse” and consumers are reducing debt, the central bank said in its Financial Stability Review on April 25. Lower demand may undermine corporate earnings, it said.
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