South African business confidence falls amid weak growth

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JOHANNESBURG (Reuters) – South African business confidence declined in July as import and export volumes, manufacturing and new vehicle sales all fell, a survey showed on Wednesday.

The South African Chamber of Commerce and Industry’s monthly business confidence index fell to 92.0 in July from 93.3 in June, the business body said.

Six of the thirteen sub-indices declined in July from June, SACCI said. Those included merchandise import and export volumes, manufacturing, vehicle sales and the real value of building plans passed.

South Africa’s economic growth outlook remains uncertain. Data last month showed unemployment had risen to an 11-year high. Earlier data showed economic growth shrank in the first quarter.

Initial optimism around President Cyril Ramaphosa’s ability to revive the economy has faded, leaving South Africa’s business community increasingly frustrated.

“The high level of optimism that existed immediately after the election of President Ramaphosa, is being affected by indications that the ruling party is divided on policy, political and factional lines,” SACCI said in a statement.

SACCI added that the poor financial position of state-owned enterprises and municipalities “continues to be a huge cause for concern”.

Struggling state-owned firms like power utility Eskom and South African Airways rely on government bailouts for survival, straining the national budget.

Reporting by Olivia Kumwenda-Mtambo; editing by Larry King

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