The Business Consumer Index is down again for June to 92.6 and signals a potentially long road to recovery for companies and consumers, but all is not lost, according to group executive at Innovation group Pule Mokoena.

This comes as some business analysts have also speculated that the SA economy could dip into an official recession by October.

Mokoena says South African businesses must try to view the economic downturn in context. "It is not just South Africa which is facing hard and uncertain times. The world economic market overall is uncertain at this stage, but all cycles – good and bad - come to an end. In fact, South Africa is weathering the global downturn comparatively well and the country's strong macro-economic policy should stand it in good stead. We are in relatively good shape to respond to an up-tick in global markets."

Meanwhile in its latest report, the SA Business Chamber of Commerce and Industry (SACCI) says the political turmoil in Zimbabwe and the poor response coming from "certain African quarters" has led to negative sentiment towards southern Africa. SACCI said this has had a negative effect on business confidence in South Africa.

The average for the SACCI BCI in the first half of 2008 was 93.4 compared with the average of 100.5 in the first half of 2007.

"The spectre of another rate hike in August when the Monetary Policy Council meets, coupled with rising petrol, electricity and food prices, seems to suggest a delayed economic recovery. But I think that the country's macro-economic policies remain strong and despite a number of external global factors - like the much-publicised subprime mortgage crisis and credit crunch faced by many countries - we should be heading for less choppy waters as we approach the third and fourth quarters of next year," adds Mokoena.

"Also, as we head towards the 2010 soccer World Cup I believe a more positive business sentiment will start emerging. Consumers and companies just need to fine-tune their current business strategies and ensure they are well placed to weather the storm. Those companies that plan for the business upturn now are the ones that are really going to shine."

Innovation group is the South African subsidiary of London-listed global business process outsourcing operation, Innovation Group plc.

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