Business confidence is showing improvement

BUSINESS sentiment in South Africa began the third quarter of the year on the front foot, snapping subdued business confidence that was prevalent in the second quarter.

The SA Chamber of Commerce and Industry’s (Sacci), Business Confidence Index (BCI) released on Wednesday showed the index strengthened to 94.7 points in July, from 93.7 points in the previous month. June’s sentiment print was a fifth consecutive month that business confidence fell, as the Ramaphoria effect seemed to dissipate.

Sacci said the biggest positive month-on-month influence on the BCI in July were merchandise export volumes, lower inflation and real retail sales.

But the decline in precious metal dollar prices, and the number of new vehicles sold made the largest negative month-on-month impact on the BCI in the period.

Richard Downing, an economist at Sacci, said it appears the downwards trend in the business climate since February has lost its momentum and confidence could turn more positive.

“This mainly depends on the removal of economic policy uncertainties and the nurturing of all global economic relations for the benefit of South Africa and all its people,” Downing said.

Professional services firm EY’s growth barometer for South Africa 2018 released this week showed that 58 percent of middle-market companies were targeting growth of between 6 and 10 percent.

A further 30 percent were targeting growth in excess of 10 percent, while only 12 percent expected a decline in growth.