South Africa’s business confidence remained steady at a low level in the second quarter, survey results from the Bureau For Economic Research showed on Thursday.
The RMB/BER Business Confidence Index was unchanged at 28 amid a sharp drop in sentiment among vehicle dealers and manufacturers.
Morale improved in the construction, retail and whole trade sectors.
“The latest survey results have dampened hopes of a strong bounce-back following the first quarter’s contraction in GDP,” the BER said.
The survey is showing a consistent picture of weaker domestic demand and these trends are worrying as global headwinds are getting stronger, the think tank said.
Citing the price and profitability indicators of the survey, the BER said they continue to suggest pressure on margins, implying that the probability of a cut in the repo rate at the South African Reserve Bank’s July policy session has increased further.
Results of a separate FNB/BER survey showed late May that consumer confidence recovered slightly in the second quarter.
That said, household budgets are under pressure due to higher personal income taxes, steep rise in fuel and electricity prices, the BER said.
The BER expects further weakening in real consumer spending growth during this year.
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