Business confidence in South Africa remained strained, as the South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) improved only marginally from 93 points in December 2012 to 94 points in January 2013.
The latest BCI, released on Thursday, was 3.1 points below the January 2012. With the BCI having reached 100 in 2010 and a record high of 122.1 in December 2006, the current BCI level remained far from desirable, Sacci stated.
Positive contributions to business confidence on a monthly and an yearly basis were made by manufacturing, construction and new vehicles sales while, among the six financial subindices, credit to the private sector and share prices also made positive contributions.
However, ongoing labour protests, intervention in the economy by the State and policy uncertainty weighed heavily on business confidence, the chamber highlighted.
“Various recent announcements by government spokespersons against the mining industry were poorly timed and constructed, given the need to urgently attract investment into this industry. The resilience of the private sector, despite developments that tarnished South Africa’s attractiveness as an investment destination, mitigated a contraction in business confidence,” it noted.
Sacci indicated that dramatic response measures would be necessary to restore trust and predictability to the business environment.
Meanwhile, emerging market and developing economies continued to be regarded as the driving force of global economic growth in 2013.
“By fostering fixed investment and an improved business climate, South Africa could benefit substantially from global investor and trade interest,” the chamber stated.