The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) declined by 1.6 points month-on-month to 91.8 in March.
The index is also 5.8 points below the March 2018 figure of 97.6.
The rand exchange rate against the major trading and investment currencies, interrupted electricity supply and electricity tariff increases, as well as slowing manufacturing output were the largest contributors to the negative trend of the BCI in March compared with February.
The March readings reflected a depreciation of the rand, higher core inflation and less merchandise import volumes compared with the previous month. Merchandise export volumes were, however, higher in March 2019.
In March, six of the thirteen BCI subindices improved month-on-month, while four declined and three remained unchanged.
“The BCI reflects a depressed business climate that is dominated by concerns over continued difficult and uncertain domestic economic circumstances. The upcoming general elections in May add to this uncertainty. Moody’s non-pronouncement of its latest ratings review of the economy provides a short-lived relief of the dreaded fear of a downgrade,” said Sacci.
The chamber added that there are some positive short-term business climate indicators that are in response to efforts and measures by government to grow the economy, and tenacity and resilience on the part of business in the face of the challenges of fuel increases, electric tariff increases and load-shedding.
The current business climate mood will, however, remain in suspense until after the elections.