Ricochet News

Business confidence pulls back slightly in Feb, but still positive: SACCI

Mar 7, 2018
Business confidence pulls back slightly in Feb, but still positive: SACCI

The South African Chamber of Commerce and Industry (SACCI) on Wednesday released the February 2018 SACCI Business Confidence Index (BCI) at its Offices in Rosebank, Johannesburg.

It upheld the improvement of business confidence, but pulled back by 0.8 to 98.9 in February 2018 after recording a relative high level of 99.7 in January 2018.

"The BCI for February 2018 is 3.4 index points higher than a year ago and kept to levels above 95 since November 2017," the Chamber said.

"The direction of various business climate indicators is still positive although the pace of improvement has slowed from the exceptional positive mood in December 2017 and January 2018.

"Although the present business confidence contains substantial positive sentiment, investment decisions will soon have to become reality to create sustainable higher economic growth and employment prospects."

SACCI said that six of the thirteen sub-indices that comprise the SACCI BCI, had a negative monthly impact in February 2018 – declining from exceptional improved levels in January 2018.

"The annual improvement of the BCI in February 2018 was the result of ten of thirteen sub-indices that improved and two that were unchanged on a year ago.

"The largest annual positive contributions to the business climate were from lower inflation, increased merchandise import volumes, improved new vehicle sales and increased manufacturing output. The high real cost of financing and less merchandise export volumes had a negative annual effect on the BCI," it added.

"During the World Economic Forum (WEF) meeting in Davos in January 2018, the President of South Africa (then Deputy President), promoted South Africa as an investment destination assuring investors of a secure and stable investment environment. Many of the policy proposals should thus be targeting concerns of international credit ratings agencies as well as those for potential local and international investors."

The SACCI said that the 2018/19 Budget was an effort to manage a desperate situation and a resolve to turn the economy away from the fiscal cliff and prevent a worse outcome that was structurally pending and a possible downgrade to below investment status.

"The lower inflation and the stronger rand exchange rate together with a Budget indicating government’s resolve to turn back from the fiscal cliff could accommodate an easier monetary policy stance that should further enhance the economic performance over the medium-term. Greater economic policy consistency and predictability should add to the present improved business confidence level," it added  

For a full background to this month’s SACCI BCI see the Economic Commentary in the BCI report on www.sacci.org.za.