The South African Chamber of Commerce and Industry (Sacci) Business Confidence Index (BCI) declined by 0.4 index points to 88.8 in October, reaching its lowest October level since 1999.

The BCI was also 2.3 index points below the October 2013 level of 91.1, which Sacci said stemmed mainly from tighter financial conditions than experienced a year ago, with no relief for business confidence expected soon from the financial subindices.

“The poor performance of the BCI in 2014 that continued into October brought to account whether the economy and the business climate could improve in the short term. The mood gripping the business climate calls for the business environment to be thoroughly interrogated for factors affecting the local business environment negatively,” Sacci noted, adding that the Labour Indaba, which had taken place on Tuesday, was one process addressing this need.

Sacci explained that, while 11 of the 13 BCI subindices were either positive or neutral in October, compared with September, the overall BCI still declined slightly as six subindices had not materially changed month-on-month.

Sacci said the neutral position of half of the subindices indicated tentativeness in anticipation of being directed away from the present adverse circumstances.

“A sign of the possible bottoming out from the present levels of business confidence emerges from the year-on-year improvements in levels of the physical economic subindices of the BCI in October,” Sacci pointed out. 

The chamber stated that to improve business confidence, the private sector needed convincing that the economy was entering a new era of economic growth.

“The Minister of Finance acknowledged the challenges faced in the economy when presenting his medium-term fiscal outlook. However, fiscal policy improvements are but one aspect of a comprehensive package of policy and business environment reforms required to bolster business confidence,” Sacci expressed.