The downward trend in the South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) for February, has been arrested, as it remained around the 80 index mark, CEO Alan Mukoki said on Monday.

After measuring 79.6 in December, the BCI marginally improved to 80 in January and was virtually unchanged at 80.1 last month. Year-on-year, the BCI lost 12.7 index points, falling from its peak of 92.8 in February last year.

“The continuing uncertain business climate and wavering economic performance exacerbated the hesitant business mood in February,” Mukoki said, adding that the lower credit rating in December and efforts to avoid a further downgrade confirmed the imperative of turning the present economic direction around.

He further highlighted that President Jacob Zuma’s State of the Nation Address, as well as Finance Minister Pravin Gordhan’s Budget 2016 speech were important occasions to address future economic policies. “Much will depend on the application of these policies,” he stated.

Mukoki further said these were important proceedings that had the potential to stem the negative tide that had become a feature of the local economy.

“It is important that the statements are followed by concrete action and implementation. Results will take time to emerge and restore investor and business confidence. It is vital that the resolution of serious economic challenges and the intentions of policy-makers bear fruit.  This is a critical window of opportunity,” he added.

The month-on-month changes of the BCI’s subindices in February were similar to that recorded in January. Besides the five positive month-on-month changes in February, one subindex remained unchanged and seven were negative.

Two real activity subindices and three financial subindices contributed positively to the BCI in February month-on-month. The financial variables were more favourable to the business climate than in January, with share prices, precious metal prices and the weighted rand exchange rate turning positive month-on-month.

The comparative year-on-year business circumstances in February were similar to those prevailing in January – two neutral, one positive and ten negative year-on-year moves by the subindices.

With ten subindices negative year-on-year, one subindex – the value of building plans approved – positive and two undecided, the BCI was notably lower in February this year than in February 2015.

Aggregate changes in real economic subindices from a year ago did not have a positive impact on the BCI in February this year, while changes in the financial environment were more negative in February than in January.

However, real economic subindices were marginally better month-on-month in February than in January.