Uncertain times? Perceptions indicate continued dip in business performance (July – September 2016)

Uncertain times? Perceptions indicate continued dip in business performance (July – September 2016)

The Business Climate Index continued to project pessimistic sentiments regarding the business environment across all sectors during the current quarter (July – September 2016). The index score is 87.06, representing an improvement of 7.8 points over the score of 79.2 points from the preceding quarter (April – June 2016). Despite this improvement, however, the conditions for doing business remain well below their potential. This is the fifth consecutive quarter for which the business climate index has indicated unfavourable business performance, which points to persistent vulnerabilities and uncertainties in the business environment. This continued dip was largely driven by unexpectedly poor performances in the agricultural and manufacturing sectors. In particular, the agricultural sector suffered the effects of a debilitating drought, and the manufacturing sector was challenged by a weakening local currency, leading to rising input costs. Predictions of future business sentiment (October – December 2016) indicate expectations of a modest recovery in business performance, largely driven by improvements in the services sector. Business performance in the agricultural and manufacturing sectors is expected to improve but, nevertheless, to remain below potential.

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• Published Dec 17, 2016