Slight improvement in business sentiment: SACCI

Technology

The South African Chamber of Commerce and Industry (SACCI) has reported an uptick in business sentiment, in its latest Business Confidence Index (BCI).

SACCI reported that “after the BCI declined to its lowest level thus far in 2017 in August 2017, the Index recovered by 3.4 index points to 93.0 in September 2017.

“The BCI also improved on last year’s September level by 2.7 points. Although the business climate improved on August’s 2017 subdued business conditions, the slow-growing economy still constrains business activity.”

SACCI expressed concern that real gross fixed capital formation (capital investment) declined in the 2nd quarter of 2017 and that fixed investment by the private sector continued its downward trend as investment in transport equipment and in residential and non-residential buildings diminished.

“Apart from the economic impact on public finances, a number of public sector institutions, especially those operating as quasi-enterprises, experience financial difficulties. This could have a negative effect when the credit rating agencies come up with their next assessment,” it warned.

“Aspects like slow economic growth, shortage of capital formation and restrained public finances, need a collective strong resolve to succeed and to enhance the necessary business and investor confidence to break the current negative trend line.”

Business Confidence is an important economic indicator, as it gives an insight into the background against which companies will be making investment decisions.

SACCI concluded:  “The South African economy is experiencing a myriad of challenges. Although some matters like inflation, monetary policy and certain BoP aggregates reflect easier circumstances, aspects like slow economic growth, shortage of capital formation and restrained public finances need a strong resolve to succeed and create the necessary business and investor confidence. “

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