Business confidence down amid signs of slow recovery

Lower volumes of merchandise exports, a domestic sales slump of new cars, fewer building plans passed, and a lower rand exchange rate have all contributed to the business confidence index slipping 0.9 points in December, according to the SA Chamber of Commerce and Industry (Sacci).

In November the index stood at 96.1 but as 2019 dawned business confidence had dropped to 95.2.

Year-on-year, Sacci’s index was also down by 1.2 points.

December’s confidence dip is attributed to a normalisation of expectation following December 2017’s buoyant mood after Cyril Ramaphosa’s ANC leadership takeover.

His election just over a year ago meant that the “business climate improved substantially on positive sentiment and expectations for the economy”, Sacci said.

The good news is that the turnaround seems to be feeding into a long-term upward curve of confidence in the country’s business prospects.

In 2017 the index average was 94.4 compared to last year’s 95.5.

“It has become apparent that it will take longer to put the economy back on an upward trajectory due to structural and prolonged erosion of administrative capacity and competence to the economy under the misrule of Jacob Zuma,” Sacci said.

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