The South African Chamber of Commerce and Industry (SACCI) today released its December 2017 Business Confidence Index (BCI).
The index improved by a further 1.3 index points in December 2017 to 96.4 following on the improved business mood in November 2017.
The BCI was nearly seven index points better in December 2017 than the lowest 2017 BCI level of 89.6 in August 2017. Starting at 97.7 in January 2017, the BCI dipped to below 90 in the middle of 2017, but since then recovered lost ground to close 2017 at 96.4. The average for the BCI in 2017 was slightly up to 94.4 compared to the average of 93.5 for 2016.
The current improvement in the business mood is only partially explained by the BCI as political developments taking place in the Southern African region, also contributed to raise expectations. The anticipation for more policy certainty and sustainable growth orientated domestic economic policy, global economic growth, and a probable fresh approach towards business and investor challenges, should further augment the business mood.
Four of the thirteen sub-indices that comprise the SACCI BCI, had a positive month-on-month impact in December 2017; five sub-indices moved sideways and four were negative. Five of the seven real economic sub-indices had either neutral or positive month-on-month impacts on the business confidence index in December 2017 and imply improving activity in the short-term.
The improved year-on-year BCI in December 2017 was the result of six sub-indices improving on a year ago, three sub-indices remained unchanged, and four sub-indices were negative. Only two of the seven real economic activity sub-indices had a negative year-on-year effect on the December 2017 BCI while financial conditions also were more positive in December than a year ago with four of the six sub-indices contributing positively to the BCI.
The business mood and business climate have been supplemented by traces of improvement in the financial markets and the economy and the latest economic figures confirm suggestions of improving prospects. The challenges faced by fiscal consolidation, unemployment, excessive debt, low growth and sovereign credit ratings remain challenges that require visionary leadership and urgent and strong action going forward.
There appears to be suggestions of optimism beyond the improvement in SACCI’s Business Confidence Index. Economic dynamics in Southern Africa have set in motion the realisation that economic performance could improve to serve the broader population.