The South African Chamber of Commerce and Industry's (Sacci's) Business Confidence Index (BCI) decreased to 94 points in March, which is marginally down from the 94.3 recorded in February and the 94.5 recorded in January.
In light of the impact of the lockdown on the business climate and economic activity, the private sector has shown resilience and tenacity with a substantial number of businesses managing to survive the adverse climate, Sacci says.
The first quarter’s average of 94.3 is higher than the 91.6 recorded in the first quarter of 2020.
Nevertheless, the business climate remains constricted owing to continuing economic uncertainty and the prospects of a further lockdown in the offing, with expectations that South Africa may soon face a possible third wave of infections.
For the six months ended March 31, 2021, the BCI average improved by 13.2 index points on the same average assessment of the preceding six months.
The positive month-on-month contributions to the BCI in March were the result of the increased number of new-vehicle sales and higher volume of merchandise imports, followed by lower levels of inflation.
Compared with March 2020, the year-on-year improvement in the BCI in March this year by 4.1 index points was mainly enhanced by easier financial conditions – although more new vehicles sold in March also surprised on the upside, the chamber explains.
Sacci further points out that, what remains of concern is the effect of the public sector on the broader economy and the longer-term implications of the public sector's suboptimal delivery of public collective services relative to substantial social needs and the concomitant impact on poverty.
Since the third quarter of 2020, the lockdown process caused less disruption to the broader economy, although it is speculated that this triggered some medium-term sectoral damage.
“The vaccination process should play an important positive role in re-igniting the economy, with more space for recalibrating the management of government, but also to refocus the private sector and local and foreign investors into investing in an economy with inherent potential,” the chamber states.