Policy uncertainty remained strongly elevated and stayed well in negative territory during the third quarter, the North West University (NWU) Business School reported on Wednesday.

Its Policy Uncertainty Index (PUI) increased to 53.1 in the third quarter, compared with 52.9 in the second quarter.

The business school points out in a statement that the global geopolitical environment has become increasingly risky and uncertain.

"The immediate threat is that the global economy continues to have a dangerous trade war on its hands, apart from other geopolitical tensions," it states.

It adds that there have been increasing worries about slowing European Union economic activity, especially in the German economy, while Brexit remains an immediate source of uncertainty for world trade, depending on whether October 31 brings a hard Brexit or a soft one.

In South Africa, negative factors slightly outweighed positives ones in determining the level of policy uncertainty in third quarter.

"However, although there remain a number of uncertain factors in the economic and political environment, it was not all bad news over this period. One good example was South Africa successfully issuing bonds on international markets in September on favourable terms, which was also seen by many as an expression of investor confidence in the country. Growth also rebounded slightly in recent months.

"The appointment of an 18-member Economic Advisory Council by President Cyril Ramaphosa came too late in the quarter to seriously influence the policy environment but offers future potential. On the other hand, the economy has entered its seventieth month of a weakening business cycle, according to the latest South African Reserve Bank Quarterly Bulletin. The number of quarters with negative growth has increased markedly since 2014. Business confidence levels are at an all-time low. Two business confidence surveys in September drew a very negative picture of the current business mood," the NWU Business School states.

It further notes that the biggest single positive factor in the third quarter was probably the publication of the National Treasury's "growth plan".

"It embodies pragmatic solutions to enable South Africa to break out of its 'low growth trap'. If properly implemented, it offers the prospect of creating a more stable and predictable policy environment for investor confidence and job-rich growth," it states.

"The latest PUI again confirms that the most important contribution government can make now remains to minimize the uncertainty created by its policies and actions. Policy drift remains the enemy of delivery. The National Treasury growth plan, the economic signals coming from the Medium-Term Budget Policy Statement on October 30 and the next Presidential investment 'summit' in November are opportunities for enhancing policy certainty in South Africa," it concludes.