Small bounce in business confidence, but the picture is still bleak
The RMB/BER business confidence index for the third quarter showed an economy still stuck in the doldrums, though it rebounded slightly from the dismal second-quarter plunge. The BCI came in at 35 points — up from 29 points in the prior quarter but still far below the above-50 level that indicates expansion. RMB chief economist Ettienne le Roux said there had been "no major new unsettling political events" in the period. Since 2008 the BCI has been above the neutral 50-point mark on only four occasions. Improvement in business confidence is critical for reinvigorating the economy, and a ramp-up in economic growth is key to avoiding further credit rating downgrades. The manufacturing and motor trade sectors both reported improved sentiment in the third-quarter survey, but confidence remained very low in both sectors. "Aided by an increase in production volumes, confidence among manufacturers rebounded from 16 to a still low 27. Similarly, new vehicle dealers’ confidence bounced back,...
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