The South African Chamber of Commerce and Industry’s (Sacci) Business Confidence Index (BCI) for May declined to the lowest levels recorded so far in 2017 according to a report released yesterday (Wednesday).
Sitting at 93.2 the BCI contracted by 1.7% in comparison to April this year, but grew by 1.4% when compared to the exceptionally low level of 91.8 in May 2016.
According to Sacci senior economist , Richard Downing, this decline was due to the heightened political tensions in SA, economic policy uncertainty and lower credit ratings by rating agencies such as Fitch and Standard and Poor’s.
He noted that while the economy remained stable there were still severe constraints on performance which was evidenced by the recessionary conditions announced by Statistics South Africa earlier this week.
The report highlighted that a stronger rand exchange rate had made the largest year-on-year positive contribution, while lessened import volumes had contributed negatively.
Downing also stressed that fiscal restructuring, flexibility in the labour market, and a reduction in the regulatory burdens for business and foreign investors were required in order to restore confidence and improve economic growth.
