South African business confidence increased to a five-month high in January as vehicle sales rebounded and manufacturing expanded, the South African Chamber of Commerce and Industry said.
The index rose to 94 from 93 in December, the Johannesburg-based chamber said in an e-mailed statement today. The measure is compiled from 13 economic indicators, including retail sales, inflation and financial gauges, such as a stock-market index and currency.
Manufacturing, vehicle sales and credit growth had “positive contributions to business confidence,” the chamber said. The index “might recover more strongly during 2013.”
The central bank is forecasting economic growth of 2.6 percent this year, compared with 2.5 percent in 2012, the slowest pace since a 2009 recession. The Reserve Bank kept the benchmark interest rate unchanged at 5 percent since July to help stimulate the economy as mining strikes and a slump in demand from Europe curbed exports.
Manufacturing expanded 3.4 percent in November, the fastest pace since July and more than the 1.1 median estimate in a Bloomberg survey of eight analysts. Factory output accounts for about 15 percent of the economy. Vehicle sales growth accelerated to a six-month high of 14 percent in January, the National Association of Automobile Manufacturers of South Africa said on Feb. 4.
While a weaker rand has hurt confidence, the impact on inflation was neutral for the business confidence index, the chamber said. The rand has dropped 4.8 percent against the dollar this year, the second-worst performer after the yen among the 16 major currencies tracked by Bloomberg. Inflation accelerated to 5.7 percent in December, near the top of the central bank’s 3 percent to 6 percent target.