Business confidence improves

Tuesday, May 5, 2015

Pretoria - Business confidence recovered in April to reach 89.9, said the South African Chamber of Commerce and Industry (Sacci) on Tuesday.

Releasing the monthly Sacci Business Confidence (BCI) for April, Sacci said the BCI recovered by 0.8 index points from the lower 89.1 recorded in March 2015 to reach 89.9 in April.

According to Sacci, the BCI in the first four months of 2015 suggests that the business climate is heading towards a more dismal 2015 than 2014 if the present inclination continues.

The month-on-month changes in the sub-indices of the Sacci BCI were much more encouraging than in March 2015. “This should not be regarded as a turnaround but at least deviates from the short-term dispositions of a number of months.

“On a year-on-year basis, the positive monthly changes did not follow through. The serious structural economic constraints, notably utility services by the public sector, are preventing the enhancement of business activity. Only two of the thirteen sub-indices were positive while none of the six financial sub-indices improved on April 2014,” said Sacci.

Notwithstanding economic setbacks, businesses are forging ahead and have shown endurance, resilience and the resolve to sustain themselves despite various cross winds. 

South Africa has been following a mild monetary policy stance given weak real domestic demand and debt levels of consumers. However, Sacci said that inflation in South Africa could, however, accelerate in the near future as there is the anticipation of rising fuel  and energy prices, a weaker rand, increased costs of municipal services  and rising real labour costs.

“Sacci is cautious on the political and social risks in South Africa that have surfaced prominently during April 2015 as serious impediments to the economy and for doing business in South Africa. The risk assessment looks at the climate in which business has to be conducted and matters like government’s control mechanisms, conflicts between different population groups, alternative government or opposition movements, and the evaluation and importance of goals set by government,” it said. - SAnews.gov.za