BUSINESS confidence improved slightly in April, but the business chamber that compiles the index warned it is pointing to a dismal business climate this year compared with last year.

The South African Chamber of Commerce and Industry’s (Sacci’s) business confidence index (BCI) recovered 0.8 index points to 89.9 in April. This level was 2.7 index points lower than the 92.6 recorded in April 2014.

"The Sacci BCI in the first four months of 2015 suggests that the business climate is heading towards a more dismal 2015 than 2014 if the present inclination continues," the chamber said.

The chamber said that while monthly changes to the economic indicators the index tracked were more encouraging in April than in March, this should not be regarded as a turnaround.

Sacci BCI

Manufacturing, exports, imports, retail sales, inflation, share prices, real private sector borrowing and the rand exchange rate were the economic indicators that were recorded as positive. Vehicle sales and real financing cost indicators were negative on the month, while municipal services, construction of buildings and precious metal prices remained unchanged.

Indicators performed worse in April this year compared with the same period last year. "The serious structural economic constraints, notably utility services by the public sector, are preventing the enhancement of business activity," Sacci said.

The chamber said companies were, however, surviving despite a challenging environment. Challenges identified in the past have included electricity supply disruptions and weak demand.

Sacci also said that rising inflation, a weaker rand, and higher costs of municipal services and labour would weigh on businesses.

 

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