JOHANNESBURG- The South African Chamber of Commerce and Industry’s January Business Confidence Index recorded its highest level of 99.7 in two and a half years in January 2018, the organisation said yesterday.
Commenting on the findings, Richard Downing, an economist at SACCI said in October 2015, the BCI measured 102.3. The BCI improved by 3.3 index points in January 2018 following on the improved level of 96.4 in December 2017 while the index is two points higher than the 97.7 of January 2017.
“Apart from a more improved and positive business mood, there are indications from various short-term economic and market indicators that the pace and direction of change reflects a more upbeat business climate,” said Downing.
He added that there was an expectation that new leadership will lead to more pragmatic and predictable in business and economic policy options.
“Although the present business confidence carries a great deal of positive sentiment, the
investment environment will benefit most from this sentiment to enhance sustainable economic growth and employment prospects,” he said.
Furthermore, only three of the thirteen sub-indices that comprise the SACCI BCI, had a negative monthly impact in January 2018; nine sub-indices were positive and one was unchanged.
The ten positive and neutral sub-indices in January 2018 – following on the nine monthly positive and neutral effects of December 2017 – confirm a continuing improvement of the business climate.
“Increased merchandise trade import volumes, a stronger weighted rand exchange rate and higher retail sales volumes had the most notable positive monthly influence on the BCI in January 2018,” said Downing.
He also suggested that the annual increase in the BCI in January 2018 was caused by ten sub-indices improving on a year ago, two sub-indices that remained unchanged, and one sub-index that was negative.
“The largest annual positive contributions to the business climate were from lower inflation, increased merchandise export volumes, and more buoyant retail sales,” he said.
He added: “If the present local positive momentum and policy changes could be effected, growth for South Africa could well exceed IMF forecasts. This could spur further reforms that cover structural impediments, lift potential output and make growth more inclusive.”
“It is therefore probable that the assessment of an environment that is ripe for local and foreign fixed investment, if achieved, will also greatly benefit and help to remedy the important challenges and adjustments facing the South African economy over the immediate and medium-term,” said Downing.