Russia/Ukraine war may disrupt SA business
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The Rand Merchant Bank (RMB)/Bureau for Economic Research Business Confidence Index (BCI) has increased to 46 in the first quarter of this year, after remaining flat at 43 points in the fourth quarter of last year. Although the reading remains below the neutral 50-point mark, RMB says it is, nonetheless, encouraging given the index grew from a record low of five points at the height of the Covid-19 outbreak in 2020.
Notably, the survey timeframe fell before the Ukraine invasion started and that event may have an impact on the next quarter’s BCI, given that the conflict is causing a surge in the oil price past $120/bl.
Of the three sectors that showed an increase in confidence in the first quarter of the year, new-vehicle dealers had the biggest improvement. Sentiment from these respondents recovered to 54 in the first quarter of this year, compared with a level of 41 in the fourth quarter of last year.
RMB explains that improved supply made for increased sales, but dealers could still not fully satisfy demand.
Wholesale confidence edged higher to 57 as a result of favourable conditions in the agricultural and mining sectors leading to strong machinery and chemical sales, but sales of consumer goods weakened.
Notably, the survey timeframe fell before the Ukraine invasion started and that event may have an impact on the next quarter’s BCI, given that the conflict is causing a surge in the oil price past $120/bl.
Of the three sectors that showed an increase in confidence in the first quarter of the year, new-vehicle dealers had the biggest improvement. Sentiment from these respondents recovered to 54 in the first quarter of this year, compared with a level of 41 in the fourth quarter of last year.
RMB explains that improved supply made for increased sales, but dealers could still not fully satisfy demand.
Wholesale confidence edged higher to 57 as a result of favourable conditions in the agricultural and mining sectors leading to strong machinery and chemical sales, but sales of consumer goods weakened.
