South African Business Confidence Drops as Strikes Spread
South African business confidence dropped in September from a five-month high as strikes that began at platinum mines spread to the transportation industry.
The business confidence index fell to 91.7 from 95 in August, the Johannesburg-based South African Chamber of Commerce and Industry said in an e-mailed statement today. The index is compiled from 13 economic indicators, including retail sales, inflation and financial gauges, such as a stock-market index and currency.
The index indicates “a depressed level for local confidence,” Sacci said. “Recent developments in the domestic labor market weighed heavily” on sentiment.
South African economic growth will probably slow this year to 2.6 percent from 3.1 percent last year as demand for manufactured exports from Europe wanes and strikes at gold and platinum mines spread, Reserve Bank Governor Gill Marcus said on Sept. 20. The Reserve Bank cut its benchmark interest rate for the first time in 20 months in July, lowering it to 5 percent.
Manufacturing output, which accounts for 15 percent of the economy, contracted 1 percent in the second quarter, and probably continued shrinking in the third quarter, according to the Kagiso Purchasing Managers’ Index.
Platinum companies may fire more than 8,000 workers after a strike that started at Lonmin Plc. (LMI)’s Marikana mine in August spread to other gold and platinum mines, SBG Securities Ltd. said yesterday.
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