The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) declined slightly by 0.3 points to 91.1 in October, with major activities like manufacturing output, retail sales and new vehicle sales contributing to the downward pressures on the index.

It was only the second time in the last six months that the BCI was above the level of 91 index points. The October BCI was 0.9 index points below that of the October 2012 index.

Six subindices of the BCI failed to change meaningfully between September and October, reflecting a tentative business mood. On a year-on-year basis, six subindices made positive contributions to the BCI and seven had a negative impact.

Sacci was concerned that the ongoing labour disputes and disruptions to business, as well as the risks to South Africa’s sovereign ratings, were a continual weight on an already tentative business climate. Lingering economic challenges in some of the larger economies of the world also contributed to the tentative business climate, resulting in low business and investor confidence.

Sacci hoped that the resilience led by the JSE, where the all-share price index set new record levels in October, would support improved confidence on a broader economic front. The prospects for world economic growth was set to improve by 0.7 percentage points to 3.6% in 2014, while in February 2014 the US may find a longer-term solution to its fiscal challenges, thereby facilitating greater stability in the world’s largest economy.

It was imperative that the strengths of the Medium-Term Budget Policy Statements were supported by broader government policy to promote business and investor confidence, said Sacci, noting that the promotion of the National Development Plan as a comprehensive framework for accelerated economic growth was also key to turning the tide on the tentative business climate in South Africa.