The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.
The BCI was 3.6 index points lower than the 92.7 recorded in March 2014 and averaged at 90.4 in the first quarter of this year, compared with an average 89.3 in the fourth quarter of 2014 and 91.7 in the first quarter of last year.
Sacci stated that the current economic situa- tion was not supportive of a restored business mood, despite the 2015 first-quarter BCI implying improved business confidence, compared with the end of 2014.
Only one of the six financial subindices was positive month-on-month in March, compared with three in February. Two of the seven physical activity subindices recorded positive month-on-month changes in March, compared with four in February. A further three subindices recorded negative month-on-month changes, while two remained unchanged.
Nine of the thirteen subindices making up the Sacci BCI turned negative over the 12 months to March. Real activities, such as manufacturing, exports, vehicle sales, retail sales and building construction pulled the BCI down during the month.
Negative events had impeded the South African economy and business environment last year and were continuing to threaten to further adversely impact on the economy this year and beyond.
The prospect of labour strikes and work stoppages was causing uncertainty among business, while the performance of the global economy was hindering the export avenue.
The underperformance of some of its fellow Brazil, Russia, India, China and South Africa, or Brics, partners, most notably Brazil and Russia, was also impeding South Africa’s economic performance.
Issues surrounding property rights and foreign-owned investment would have a detrimental impact on investment decisions – particularly foreign investment – and could jeopardise future economic growth.
The poor savings effort in South Africa made foreign investment an imperative if growth was to remain a priority. Sacci stated that, “loose ends must be tightened to nurture business confidence among local and foreign business before further momentum is lost”.