Business confidence in South Africa fell to 88.8 in October, from 89.2 in September, reflecting uncertainty as the economy tries to deal with domestic and global headwinds. “The challenge to improving business confidence is for the private sector to be convinced that the economy is entering a new era of economic growth,” the South African Chamber of Commerce and Industry (SACCI) said in a statement today. SACCI said it was important to anticipate and try to soften the effects of external developments on the economy, while locally business owners were uneasy about tax increases that the finance minister is expected to introduce next year.
“The BCI was 2.3 index points below the level of a year ago when the BCI measured 91.1 in October 2013.” SACCI emphasised that 88.8 was the lowest “October level” since 1999. The lowest ever reading for the index since its inception in 1985 was in April 1985 at 76.1. The BCI’s highest reading was 122.1 in December 2006. “The poor performance of the BCI in 2014 that continued into October brought to account whether the economy and the business climate could improve in the short-term,” the chamber said. “The mood gripping the business climate calls for the business environment to be thoroughly interrogated for factors affecting the local business environment negatively.”
SACCI reported further that 11 of the 13 BCI sub-indices in October were either positive or neutral compared to September 2014. “The overall BCI still declined slightly as six sub-indices did not materially change between September and October 2014. “The neutral position of half of the sub-indices of the BCI indicates tentativeness in anticipation of being directed away from the present adverse circumstances.” The chamber said the lower year-on-year level of business confidence in October stemmed mainly from tighter financial conditions.
“The challenge to improving business confidence is for the private sector to be convinced that the economy is entering a new era of economic growth,” was stated by SACCI, but one wonders where the impulse should be coming from. Surely not from this government!!