Business confidence in South Africa is still reflecting patience and anticipation, the South African Chamber of Commerce and Industry (Sacci) said on Wednesday.
The latest Sacci Business Confidence Index (BCI) for April 2018 declined by 1.6 index points from 97.6 in March 2018 to 96.0 in April 2018. The BCI improved by 1.1 index point year-on-year compared to April 2017.
Increased merchandise import volumes, real retail sales and the real value of building plans passed made the largest positive monthly contributions to the BCI in April, while less merchandise export volumes, fewer new vehicle sales and the weaker rand made the most noteworthy negative monthly contribution to the April business climate.
It is now six months since November 2017 that the BCI kept to levels above 95. The BCI improved from an average of 95.5 in the first four months of 2017 to 98.0 for the corresponding period in 2018.
The largest positive annual contributions to the business climate in April 2018 came from lower inflation, higher new vehicle sales and the increased real value of building plans approved.
Lower real merchandise exports and imports, and ongoing high real financing costs had the largest negative effects on the business climate compared to a year earlier.
"Investor confidence holds the key to restoring the potential of the SA economy," Sacci said in its BCI report.
In its view, the present positive business mood in the country is still in the process of repositioning from where it was last year.
"Increased certainty and increased fixed investment should provide the economy with the base for growth. However, political stability, and law and order are essential ingredients and preconditions for economic advances," said Sacci.
The chamber believes SA’s leadership has a mammoth task to restore the economy to its full potential from the "interruption" over the last number of years.
Sacci believes it is important that a team has been selected to market SA as an investment destination.
"Domestic savings - at about 16% of the gross domestic product - are not enough to finance such a daunting investment effort. It is, therefore, an imperative that capital from abroad should complement the domestic savings effort," said Sacci.
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