Business confidence dropped to its lowest point last month since March 2009, the South African Chamber of Commerce and Industry (Sacci) said on Tuesday.
Its Business Confidence Index for March dropped to 95.7, after rising by 2.4 points in February.
In March 2009, when the business cycle was in a downward phase, the BCI stood at 93.1.
“The fluctuations in the BCI reflect volatile confidence within an unpredictable/uncertain business climate,” Sacci said in a statement.
Global uncertainty coupled with a tentative local outlook contributed to all sub-indices being either negative or neutral on a monthly basis.
Three of the six financial sub-indices were negative and three were neutral on a month-on-month basis in March 2012, echoing restraint in the business mood.
Negatively biased
The real economic environment was negatively biased from February to March 2012.
“The continuing fluctuations in business confidence mirror an inherent instability and uncertainty in the business environment,” Sacci said.
“Sustainable, higher levels of business confidence need a solid economic basis driven by sound, structural economic fundamentals.”
Economic assets would be created and maintained by promoting a greater focus on the investment side of the economy and shifting resources away from the consumption side.
This would enable future consumption, rather than current consumption and would secure a more optimistic and less volatile business mood, Sacci said. — Sapa