Sacci business confidence dips, but still better than a year ago

Business confidence deteriorated slightly in February, after the gains made in January and December, but confidence is higher than it was a year ago.

The South African Chamber of Commerce and Industry (Sacci) business confidence index dropped by 2.2 index points in February, to 95.5 from 97.7 in January.

However, it was 2.8 points higher than in February 2016 — the third consecutive month that the index has improved compared with a year earlier.

“The improvement over the past five months points towards the stabilisation of the business climate in SA, caused by changing local and global economic and political circumstances,” Sacci said on Wednesday.

The improvement from last year is a result of a stronger rand, and higher gold and platinum prices, while lower import volumes made a negative contribution.

Six subindices were lower than in January, and only two rose.

Compared with a year earlier, seven fell (against six in January), two were neutral (against three in January) and four rose (the same as in January).

Higher finance costs, increased energy costs and lower share prices on the JSE weighed down on business confidence in February.

Sacci said the announcement of a national minimum wage, the 2017 budget and an uptick in commodity prices, the stabilising of the rand and the global economic climate, could have a bearing on the economy over the medium to long term.

“All indications are that economic growth will pick up as the implementation and prudent authority takes hold.

“The business climate could further be improved if the constructive present economic developments could be augmented.

“Business and investor confidence depend on whether this window of opportunity will be seized, and the more positive sentiment be supported by responsible governance and accountability,” said Sacci.