Despite ongoing uncertain local and global economic and political conditions, South Africa’s business climate is seemingly normalising, with the latest South African Chamber of Commerce and Industry (Sacci) Business Confidence Index (BCI) up 3.9 points in January.
The Sacci BCI moved up to 97.7 index points in January, from 93.8 in December and 92.6 in January 2016.
“This is not only in severe contrast to the severe [ten index point] year-on-year decline of December 2015, but it is the second consecutive month of improvement on the year earlier,” Sacci comments.
The January increase was also the largest increase month-on-month since February 2015 and was also the biggest positive year-on-year difference of the BCI since the 5.3 index point increase recorded in May 2011.
“After experiencing a challenging and turbulent year in 2016, the Sacci BCI suggests improved prospects for the business climate after more normalised sociopolitical conditions prevailed towards the end of last year and the start to 2017,” Sacci points out.
The BCI also showed noticeably more positive subindices month-on-month in January than the preceding month, with only three of the 13 subindices making negative contributions during the month under review.
“If these conditions could continue to carry the day, then the momentum gained in business confidence could accelerate and create the necessary investment and economic growth atmosphere,” Sacci points out.
The exchange rate, the increased real value of building plans passed, the higher gold and platinum price and higher new-vehicle sales also contributed positively to the BCI in January.