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Business confidence continued its upward trend in November, but poor economic performance remains a concern. The business climate is still plagued by poor economic performance, recessionary conditions and high unemployment and fiscal unsustainability, says the South African Chamber of Commerce and Industry (SACCI).
The index is a mere 0.7 points higher than the 92.7 points recorded in November 2019.
Economic reforms are needed to bolster business confidence in the future, according to SACCI.
SACCI on Wednesday released the business confidence index for November, which is at 93.4 points. The index has climbed 23.3 points since the low of 70.1 points record in May 2020, amid harsher lockdown restrictions. The index is a mere 0.7 points higher than the 92.7 points recorded in November 2019.
According to SACCI the business climate is still "plagued by poor economic performance, recessionary conditions, high unemployment and fiscal unsustainability".
SACCI noted that the medium-term recovery in the business climate needs to be strengthened.
"It must build on policy decisions that restore foreign and local investor confidence, economic growth and employment creation that takes the country on an upward trajectory," SACCI said.
"It has become clear that structural reform is necessary in South Africa," SACCI added.
SACCI sees merchandise exports and commodity prices benefiting business conditions in 2021. SA's tourism sector will also be critical in attracting foreign exchange earnings, it said.
"The weaker rand exchange rate, loss of disposable household income and the high import propensity of durable spending, remain medium term challenging areas."
The low inflation and low interest rates also contributed to a positive medium-term business climate, it said.