The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI), which is a composite index of economic and financial market indicators rated by business as critical indicators of the business climate, decreased by 12.1 index points month-on-month in April.
This is the lowest level since its inception in 1985 and the second-sharpest month-on-month decline in the index’s history.
On a year-on-year basis, the BCI declined by 15.9 points.
High volatility was prevalent in global financial markets in April and was also mirrored in South African financial markets. The rand exchange rate, share prices and commodity prices – notably the crude oil price – continued to reflect global and local uncertainty and unpredictability.
The further easing of the monetary stance in South Africa and the leniency of commercial banks provided some relief for businesses and households as the impact of the lockdown took effect.
The banking sector’s efforts were evidenced by the positive impact on the financial subindices of the BCI, Sacci says.
Seven of the 13 subindices weighed negatively on the BCI, compared with March, but, despite the present unpredictability and uncertainty in the business environment, six subindices were still contributing positively to the business climate.
Four of the six financial subindices positively influenced the business climate, while real economic activity was more harshly affected, with five of the seven economic activity subindices being negative.