Picture: 123RF/RAWPIXEL
Picture: 123RF/RAWPIXEL

Business confidence fell slightly in December indicating that there has been little progress in economic performance, a survey from the SA Chamber of Commerce and Industry (Sacci) shows.

The Sacci business confidence index (BCI) fell 0.9 points to 95.2 in December from 96.1 in November 2018.

The index was driven down by lower merchandise export volumes, the decreased real value of building plans passed, fewer new-vehicle sales, and the weaker rand exchange rate. Compared to a year before, the BCI was 1.2 index points down.

“In comparing December 2018 to December 2017, the task of restoring the business and investor climate remains a major challenge,” Sacci said on Thursday.

Business confidence surged at the start of 2018 with President Cyril Ramaphosa’s appointment before falling to “a moderate level” for the rest of the year.

“After the election of new leadership to the governing party in December 2017, the business climate improved substantially on positive sentiment and expectations for the economy.

“However, it became apparent that it will take longer to put the economy back on an upward trajectory due to structural and prolonged erosion of administrative capacity and competence to the economy inflicted earlier,” it said.

For the year, the index averaged 95.5 compared to 94.4 in 2017 suggesting that it “could continue the slow turnaround”.

“The general assessment is that the present-day administration acknowledges the huge challenges ahead and the role a sound economy could play in addressing it,” said Sacci.

It warned that SA had dipped below many of the longer-term trends of economic activity and financial markets in 2018.

“Though exogenous factors such as the global economic performance were relatively positive for an open economy such as SA, the country lagged behind better-performing peer emerging markets,” it said.

This comes in the same week that the World Bank’s economic outlook showed that SA will be one of the worst performers in sub-Saharan Africa in 2019 with projected growth also substantially lower than the average growth rate of its emerging market peers.