SACCI’s October 2018 trade conditions survey indicated continued, strained activity, while the six-month prospects were muted, but stable. There are signs that the subtle turnaround in SACCI’s Business Confidence Index (BCI) in September was maintained in October 2018, by gaining another 2.5 index points to record 95.8. Last year the BCI shed 0.1 index points. The BCI was also 2.9 points higher in October 2018 than in October 2017.
As the SACCI BCI comprises of critical elements inherent to the business climate, it is significant that the average BCI for the first ten months of 2018 was higher than the average of the BCI for the same period in 2017. The adverse economic and business environment was addressed by real action and could be more sustainable and enduring if followed by economic policy certainty.
Several events and developments during October 2018 affected the local economy and the business climate. One of the important events was the appointment of Minister Mboweni on 9 October 2018, as Minister of Finance, following from the resignation of Minister Nene. Further developments included the IMF releasing its latest World Economic Outlook; Moody’s releasing a research note on South Africa’s credit rating; the Investment Summit; and the Minister of Finance delivering his inaugural Medium Term Budget Policy Statement (MTBPS) on 24 October 2018.
The economic policy should be adhered to, to require the general conditions to prevail, with sacrifices made to promote continuous, higher growth. The latest IMF and Treasury estimates for growth are below 1 percent for 2018 and only slightly better in 2019. It is timeous to make a realistic assessment of the economy and business climate, which both could benefit by taking real action.
For a full background to this month’s SACCI BCI see the economic commentary in the BCI report on www.sacci.org.za.