Photo by: Duane Daws
Although some subindices in the South Africa Chamber of Commerce and Industry’s (Sacci’s) April Business Confidence Index (BCI) instantly reacted to President Jacob Zuma’s recent Cabinet reshuffle, the index still improved by 1.1 index points to 94.9 in April from 93.8 in March.
The BCI was also only 0.6 index points lower than in April 2016, as less merchandise import volumes, higher energy costs and lower share prices than a year ago, in particular, contributed to the less favourable business climate.
Sacci noted that positive developments in the economy, therefore, still informed the business climate in April and were vibrant enough to carry the positive business climate forward.
“The positive month-on-month change in five of the 13 subindices of the BCI lifted the index, although four of the five subindices reflected positive business conditions prior to April,” it said.
Further, three of the seven real activity subindices were positive, while four of the six financial subindices either improved or remained unchanged.
“South Africa’s biggest challenge is to enhance a business environment where a larger part of the economically active population could add value in support of more employment. The challenge for growth starts with fixed investment and foreign direct investment to augment South Africa’s dismal savings rate and, thus, business and investor confidence are essential,” it stated.
Sacci stated that the management of investor and business sensitivities was of the “utmost importance”, as it could adversely influence South Africa’s risk profile in local and international financial markets and as a fixed investment destination.