“This improvement must be viewed in the context of weak performance in the first half of 2010. Notwithstanding the improved average level in the first half of 2011 relative to 2010, business confidence has been on a slight downward trend since the start of 2011,” noted SACCI.

Of the 13-sub-indices, five declined between May and June 2011 while another remained neutral. The chamber said the year-on-year changes indicate that the strength of economic improvements remains weak, with major sectors failing to demonstrate sustainable performance. It said that manufacturing and construction continued to show a lack of direction while import volumes also reflected tentative domestic circumstances.

“SACCI is concerned that since the upward phase of the business cycle started in September 2009 (as identified by the SA Reserve Bank), fixed investment by the public and the private sector declined. The slight increase in private sector fixed investment in the fourth quarter 2010 and in the first quarter of 2011 is welcomed.”

The driving force behind the current performance said SACCI is fragile as the basis for current high household spending levels is difficult to reconcile with employment levels and low credit extension.