The SA Chamber of Commerce and Industry said certain local industries were steeling themselves for the impact of a possible global trade war.
Sacci said on Tuesday that “the risk of a global trade war has alerted certain industries in South Africa, and they have already indicated it would affect industries and employment negatively, while knock-on effects have been cited by complementary industries and their export performances”.
Chief economist, Richard Downing, said that Sacci also noted that lately, South Africa has experienced a sharp weakening in the balance of payments position (BoP).
“This has resulted in a larger deficit on the current account, as well as net selling of bonds and shares by non-residents. This led to additional volatility and weakening of the rand exchange rate,” he said.
Downing said, “it has become imperative that structural economic matters hampering inclusive economic growth should be addressed with economic rationality.”
“Uncertainties surrounding economic policy direction and position should be clarified so that investor and business confidence can reaffirm itself,” he said.
Sacci said that its Business Confidence Index declined by 0.3 index points in June 2018 and measured 93.7, compared to 94 in May 2018.
“For the first time this year, the BCI was below the level of a year ago – namely 1.2 index points lower than the 94.9 in June 2017. The average for the BCI in the first six months of 2018 was 97.6, compared to the average of 95 in the first half of 2017, and 93.7 in the second half of 2017,” said Downing.
He said four of the thirteen sub-indices of the composite Saccid BCI positively affected the business climate on a month-on-month basis in June 2018. Two sub-indices were neutral, while seven sub-indices reflected negativity in the business environment.
“The biggest negative month-on-month influences on the business climate were the weaker trade-and-investment-weighted rand exchange rate, lower real retail sales, the decreased real value of building plans passed, and the higher, less stable, cost of energy supply,” he said.
Downing said that higher merchandise import and export volumes, and increased new vehicle sales, made positive month-on-month contributions to the business climate.
Increased, new vehicle sales, lower inflation, and the increased real value of building plans passed were the sub-indices that contributed positively to the Sacci BCI year-on-year in June 2018.
