Industry organisation the South African Chamber of Commerce and Industry's (Sacci's) September 2022 Business Confidence Index (BCI) increased to 110.9, implying that business confidence remains resilient at a better level than the average for 2020 and higher than the March 2020 level of 103.9 before the Covid-19 pandemic struck and economic lockdown was imposed.

The average Sacci BCI for the third quarter was 2.2 index points higher than that of the second quarter.

The average for the BCI in the first nine months of this year wat 108.7 – virtually unchanged from the average for the corresponding period of 2021, Sacci notes.

Meanwhile, Sacci notes that half of the 14 subindices of the BCI reflected a negative impact on the business climate between August and September. Higher real interest rates, lower share prices and the real value of building plans passed had the most notable short-term, or month-on-month, negative effect on the BCI.

On the positive side, inward overseas tourism and merchandise import and export volumes came in support of business confidence in the short term, or month-on-month. Inward tourism and increased merchandise import volumes, in particular, also had positive year-on-year impacts on the BCI, while the increased retail sales and output activity of the manufacturing sector were also positive on a year-on-year basis.

The global as well as the local economy is facing a difficult period ahead that stands in the aftermath of Covid-19 and the effects of the Ukraine/Russian conflict, which has translated in the world market to higher fuel and energy costs, Sacci notes.

“The local economy is additionally confronted by structural deficiencies like uncertain energy supply, an unsustainable fiscal situation, deteriorating infrastructure and high unemployment,” the chamber highlights.

“With regard to the critical energy situation, the process of the assessment and performance review is not likely to address the root causes of the Eskom crisis and other State-owned enterprises, if such review does not include the role of Cabinet as the appointing authority.

“The review ought to include the evaluation of the skills, competencies, experience and performance record of the selectors and decision makers as well. This is the only way in which effective, sustainable solutions can be realised.

"Otherwise, it will be the moving around of chairs and the avoidance of dealing with the root causes,” Sacci says.