The South African Chamber of Commerce and Industry's (Sacci's) Business Confidence Index (BCI) recorded 99.7 in January, the highest level since it measured 102.3 in October 2015.
The BCI improved by 3.3 index points in January, following on the improved level of 96.4 in December, while the index was also two points higher than the 97.7 of January 2016.
Apart from a more improved and positive business mood, there were indications from various short-term economic and market indicators that the pace and direction of change reflected a more upbeat business climate.
"There is the expectation that new leadership will lead to more pragmatic and predictable business and economic policy options. Although the present business confidence carries a great deal of positive sentiment, the investment environment will benefit most from this sentiment to enhance sustainable economic growth and employment prospects," Sacci outlined in a statement.
Only three of the thirteen subindices that comprise the Sacci BCI had a negative monthly impact in January; nine subindices were positive and one was unchanged. The ten positive and neutral subindices in January - following on the nine monthly positive and neutral subindices in December - confirmed a continuing improvement of the business climate.
Increased merchandise trade import volumes, a stronger weighted rand exchange rate and higher retail sales volumes had the most notable positive monthly influence on the BCI in January.
The year-on-year increase in the BCI in January was the result of ten subindices improving on a year ago, two subindices that remained unchanged, and one subindex that was negative. The largest positive contributions to the business climate over the past year emanated from lower inflation, increased merchandise export volumes and more buoyant retail sales.
If the present local positive momentum and policy changes could be affected, growth for South Africa could well exceed International Monetary Fund forecasts, Sacci pointed out.
This could spur further reforms that cover structural impediments, lift potential output and make growth more inclusive.
"It is, therefore, probable that the assessment of an environment that is ripe for local and foreign fixed investment, if achieved, will also greatly benefit and help to remedy the important challenges and adjustments facing the South African economy over the immediate and medium-term," said Sacci.