Business confidence Index headed for dismal year

06 May 2015

Despite a slight month-on-month recovery, the South African Chamber of Commerce and Industry (Sacci) believes that the performance of the Business Confidence Index (BCI) over the first four months of 2015 points to a “more dismal” business climate this year compared with 2014.

The BCI edged up from 89.1 in March to 89.9 in April, but had remained 2.7 index points lower than the corresponding period the year before.

While the month-on-month changes in the subindices of the April BCI were “much more encouraging” than in March, it should not be regarded as a turnaround, particularly as, 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,” the chamber said in a statement on Tuesday.

In April, only two of the 13 subindices were positive, while none of the six financial subindices improved when compared with April 2014.

“Sacci is cautious on the political and social risks in South Africa that have surfaced prominently during April as serious impediments to the economy and for doing business in South Africa.”

The chamber also warned that inflation could rise with the expected rise in fuel and energy prices, a weaker rand, increased costs of municipal services and rising real labour costs.

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


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