Picture: BUSINESS DAY
Picture: BUSINESS DAY

Business confidence has declined to its lowest level since the mid-1980s, the South African Chamber of Commerce and Industry (Sacci) says.

The optimism of recent readings in Sacci’s business confidence index — at odds with the RMB/BER business confidence index and other signals from business — appears to have faded.

Sacci said its business confidence index fell 5.7 index points to 89.6 in August, from 95.3 in July — the largest month-on-month decrease since November 2015. It was 3.3 points lower than in August 2016.

Sacci said on Wednesday: "Sacci is concerned that, given the positive sentiment and outlook prevailing in the global context, SA’s economic performance could be doing better and is suboptimal at a time when the country could be better positioned to fully utilise this opportunity and enhance economic growth and foreign investment."

While the numbers are concerning, Sacci did say: "The positive developments with inflation, interest rates and the balance on the trade account of the balance of payments could serve as inspiration for other challenging areas in the economy and reinvigorate business confidence."

On a month-on-month basis, four subindices made positive contributions to the index while five had a negative impact. The biggest drag came from lower merchandise import and export volumes.

The year-on-year decrease came as six of the 13 subindices deteriorated year-on-year. The biggest negative contributors were the significantly lower merchandise import volumes and default higher real financing costs.

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