The South African Chamber of Commerce and Industry (Sacci) Business Confidence Index (BCI) declined by 0.9 of an index point to 92.2 in January, from 93.1 in December.

This was 2.9 index points lower year-on-year.

The 93.1 of December was the highest BCI level since the 93.3 of June 2019 and the latest figures suggest that business confidence is still finding it difficult to gain momentum, Sacci said in a statement on Thursday.

Intra-month changes in the business climate were notable in January. The rand depreciated towards month-end, and share prices and commodity prices such as that of crude oil and precious metals, changed considerably.

Six of the thirteen subindices of the BCI improved on their previous month readings compared to four in December, while five were negative and two remained unchanged.

Particular positive monthly impacts on the BCI came from real retail sales, merchandise import volumes, the dollar price of precious metals and lower inflation. 

The biggest negative monthly impacts came from lower merchandise export volumes, fewer new vehicles sold and lower real value of building plans passed.

Meanwhile, the most notable negative year-on-year impacts came from lower merchandise export volumes, a lower real value of building plans passed and deteriorating energy supply.

Increased precious metals prices and lower inflation contributed positively to the business climate between January 2019 and January 2020.

A number of noticeable events and developments took place during January that not only had a bearing on the month’s business climate and the present economic milieu, but could hold implications for medium- to longer-term economic performance, Sacci asserted.

It said that more recent developments towards the end of January would have additional impacts and add to global risk and uncertainty over at least the medium term.

This includes the coronavirus outbreak in China, which underlined the sensitivity and uncertainty that plagued the global and the domestic economy, Sacci noted.

Sacci expects February to be the month in which decisive developments may take place where the State of the Nation Address and the Budget Speech could determine South Africa’s economic performance and the business climate for the longer term.