The latest SACCI Business Confidence Index (BCI) showed a 1.1 index point increase on year on year from April 2017.
The BCI declined by 1.6 index points between March 2018 and April 2018, and it is now six months since November 2017 that the BCI kept to levels above 95. The BCI improved from an average of 95.5 in the first four months of 2017 to 98.0 for the corresponding period in 2018.
There has been an increase in the merchandise import volumes, real retail sales and the real value of building plans passed, were the most significant positive monthly contributions to the BCI. A reduction in merchandise export volumes, fewer new vehicle sales, and the weaker rand made the most noteworthy negative monthly contribution to the April 2018 business climate.
The largest positive annual contributions the business climate came from lower inflation, higher new vehicle sales, and the increased real value of building plans approved. Lower real merchandise exports and imports, and ongoing high actual financing costs had the most substantial adverse effects on the business climate compared to a year earlier.
South Africa’s leadership has a mammoth task to restore the South African economy to its full potential that was rudely interrupted over the last number of years. The restoration process of the economy, starting by addressing maladministration and corruption, has been incisive and the market and economic indicators are reflecting those sensitivities.
Investor confidence holds the key to restoring the potential of the South African economy. The present positive business mood is still in the process of repositioning with business confidence reflecting patience and anticipation. Increased certainty and increased fixed investment should provide the economy with the base for growth. However, political stability and law and order are essential ingredients and preconditions for economic advances.
For a full background to this month’s SACCI BCI see the Economic Commentary in the BCI report on www.sacci.org.za