Although an improved business mood is still present, it has to be augmented by an improvement in the real economy and further focus on better financial conditions, the South African Chamber of Commerce and Industry (Sacci) said on Thursday, releasing the results of its latest business confidence index (BCI).

The Sacci BCI has slipped by 1.3 index points to 97.6 in March, from 98.9 in February and the exceptional level of 99.7 in January.

The index remains 3.8 index points above the March 2017 level.

The BCI, which has kept to levels above 95 index points since November 2017, measured an average of 98.7 in the first quarter of 2018, compared with 94.8 in the fourth quarter of 2017, as business confidence improved following the ousting of Jacob Zuma and the appointment of Cyril Ramaphosa as President. Serious attempts were also made in the first few months of the year to eradicate maladministration and financial mismanagement in the public sector.

However, although there was greater hope for economic policy certainty and a pivotal role for business, Sacci stressed that “tangible results” were required to maintain the current positive climate and momentum of business confidence.

The direction of most of the business climate indicators remained positive, but the momentum appeared to have slowed, Sacci said, adding that more certainty had to be obtained to bring fixed investment and the economy onto a healthy platform for growth.

Three of the thirteen sub-indices that make up the composite Sacci BCI had a positive monthly impact in March 2018; four sub-indices were unchanged, and six were negative month-on- month.

Increased merchandise export volumes, lower real financing cost and lower consumer inflation made the largest positive monthly contributions to the business climate, while less merchandise import volumes, lower real retail sales growth and subdued real value of building plans made the most notable negative monthly contributions in March 2016 to the business climate. 

The continued year-on-year improvement of the BCI in March was the result of eight of the thirteen sub-indices that improved and two that were unmoved.

The largest positive year-on-year contributions to the business climate were from lower inflation, increased merchandise import volumes and new vehicle sales.