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The SACCI Business Confidence Index (BCI) picked up by 3.3 index points to 87.9 in July 2015 after shedding 2.3 index points in June 2015. The July 2015 BCI level is the same as in July 2014.
However, the BCI is still 34 index points below the high level of 121.9 recorded in December 2006 and about 12 points lower than the average of 100 for 2010 that serves as base year for the BCI.

Although the BCI bounced up in July, it did not recover to above the medium-term downward trend of business confidence. Month-on-month changes in the sub-indices of the SACCI BCI were more positive in July 2015 than in June 2015. In June only one of the 13 sub-indices were positive month-on-month; nine were negative and three remained unchanged.

A notable positive month-on-month impact came from building plans passed in July while export volumes improved well on the previous month. Retail sales volumes made a marginal positive month-on-month impact on the BCI in July 2015.

The uninspiring comparative year-on-year business mood did not change for the better in July 2015. Four of the six financial sub-indices were negative, one unchanged and one was positive in July year-on-year. Lower inflation (excluding petrol, food and non-alcoholic beverages) had a positive on the BCI in July 2015. Five of the real activity sub-indices were negative and two were positive.

SACCI is concerned that the present low domestic economic growth rate is not merely the consequence of cyclical or other short-term factors, but has deeper underlying problems. There is an urgent need for persistent higher economic growth without which South Africa’s economic problems cannot be alleviated.

Present circumstances provide an opportunity to change direction towards a more normative acceptable policy approach serving longer-term economic growth imperatives. In noticing such change, business confidence could turn for the better.