Business confidence index shows improvement in September

The business climate in South Africa showed an improvement in September compared to August, according to the latest Business Confidence Index (BCI) released by the South African Chamber of Commerce and Industry (Sacci) on Wednesday.

The BCI comprises indicators valued by business as critical to their assessment of the business climate. The latest BCI shows that business confidence improved to 93.3 in September 2018 from 90.5 in August 2018.

This after the BCI declined by 4.2 index points in August 2018 compared to July. The BCI for September 2018 was 0.3 index points up on the September 2017 level, mainly the result of increased merchandise export volumes.

According to Sacci, the business climate and SA’s economic momentum are still restrained, as a result of the state of the economic and business environment over the past three years.

For the chamber it is important that these adverse conditions are dealt with in preparation of sustainable economic prospects with policy certainty.

This after the BCI declined by 4.2 index points in August 2018 compared to July. The BCI for September 2018 was 0.3 index points up on the September 2017 level, mainly the result of increased merchandise export volumes.

According to Sacci, the business climate and SA’s economic momentum are still restrained, as a result of the state of the economic and business environment over the past three years.

For the chamber it is important that these adverse conditions are dealt with in preparation of sustainable economic prospects with policy certainty.

Sub-indices

Four of the thirteen sub-indices of the composite BCI improved in September compared to August. Five were unchanged and four were negative. In August, meanwhile, three sub-indices improved month-on-month (m/m) and five were unchanged.

In September, merchandise export volumes, new vehicle sales and lower inflation were the most notable positive month-on-month contributors to the BCI.

Two of the seven real-activity indices made positive year-on-year (y/y) impacts on the BCI in September, while one (real cost of finance) of the six financial sub-indices, had a positive y/y effect on the business climate.

In Sacci’s view, the initiatives of the stimulus package announced by President Cyril Ramaphosa should be outlined in more detail over the coming months.

“It remains imperative to create and build institutional capabilities to implement and translate policy, plans and ideas into actual outcomes that can be measured and monitored,” Sacci commented.

The chamber said business confidence should benefit from the upcoming mini budget and the Investment and Jobs Summit later this month. These should provide direction and policy clarity. “Hopefully, these can shift SA out of the current technical recession and away from stagflation, which may be very costly and difficult to eradicate once it starts, both in social terms and on the budget deficit,” Sacci concluded.

Bloomberg reported earlier in the month that, based on the separate Rand Merchant Bank and University of Stellenbosch Bureau for Economic Research index, business confidence had declined to its lowest level this year in the third quarter “as industries raised concern about policy uncertainty, including about land expropriation”. — Fin 24

Keep the powerful accountable

Subscribe for R30/mth for the first three months. Cancel anytime.

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.

Agency
External source

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

PODCAST: How South Africa fits into the global economy, pt...

Michael Power chats to the M&G editor-in-chief and business journalists about South Africa and its place in the global economy

Zambian president’s first 100 days

Hakainde Hichilema came to power on a wave of optimism. Has he delivered?

WATCH: How safe are vaccinated people from the Omicron?

Leading vaccinologist, Professor Shabir Madhi explains how South Africa is lagging behind in vaccinations and how this could affect the newest variant

Small businesses need more climate financing

Small businesses are integral to climate-change mitigation, adaptation and resilience. But they need to be given the funds and support to succeed
Advertising

press releases

Loading latest Press Releases…
×