The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 2.9 index points to 89.1 in August, from 92 in July .

The index was also only one point above the lowest ever recorded BCI level of 88.1 recorded for April 1985.

In a statement on Wednesday, Sacci highlighted that it was important to note that in the last two years, the BCI had been at its lowest in the month of August, with the trend having continued this year.

The BCI for August 2017 and 2018 were 89.6 and 90.5 respectively.

Meanwhile, seven of the thirteen subindices used in compiling the Sacci BCI deteriorated between July and August, four improved and two remain unchanged.

Four of the seven economic activity indicators declined on their July levels and three of the six financial pointers used for the composite BCI deteriorated month-on-month.

On a year-on-year basis, five of the seven economic activity indicators declined, while five of the six financial pointers were either positive or unchanged year-on-year; indicating a relatively stable financial environment compared with August 2018, says Sacci.

Negative month-on-month movements occurred owing to a decrease in merchandise export volumes, a weaker rand exchange rate weighted against major trading and investment currencies, and declining all-share prices on the JSE.

Increased merchandise import volumes and the higher dollar price of precious metals made a modest but positive contribution to the BCI in August.

Although the South African economy dodged a recession in the second quarter of this year, having recorded an unexpected gross domestic product (GDP) growth of 3.1% compared with a 3.1% contraction in the first quarter, Sacci cautions that this does not indicated relief.

It noted that GDP growth in the second quarter had been driven by external factors and was not in response to specific actions by government and business to drive growth.

Sacci emphasises that the challenges responsible for the past low growth of the South African economy continue to exist and must be urgently dealt with.

“The economy is in dire need of implementation of policies to achieve economic growth and job creation.

“The current state of fiscal deficiencies, social injustices and unemployment, necessitates an urgent adjustments in how their impact is viewed, no longer as just economic terms that must be studied and converted into action, but as the likely cause of crime, violence, looting and anti-foreigner sentiments that are currently dominating news headlines locally and internationally. It is denting the status of South Africa as a favoured investment destination; and affecting the lives and businesses of ordinary South Africans.”