The South African Chamber of Commerce and Industry (SACCI) said that the BCI decreased by 0.4 index points in October, from 89.2 in September this year.
The index was 2.3 points below the level of a year ago when it measured 91.1 in October 2013.
“The BCI of 88.8 is the lowest October level since October 1999. The lowest ever reading for the BCI since its inception in 1985 was in April 1985 at 76.1. The BCI’s highest reading was 122.1 in December 2006. The current BCI is based on 2010 as its base year set at 100,” said SACCI in a statement.
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While eleven of the thirteen sub-indices of the BCI were either positive or neutral in October compared to that of September, SACCI said that the overall BCI index still declined slightly as six sub-indices did not materially change between September and October 2014.
“The neutral position of half of the sub-indices of the BCI indicates tentativeness in anticipation of being directed away from the present adverse circumstances,” continued the statement.
“The lower year-on-year level of business confidence in October 2014 stems mainly from tighter financial conditions than a year ago with no relief for business confidence expected soon from the financial sub-indices. “
(READ MORE: Bleak outlook for S.Africa's business confidence)
SACCI explained that the poor performance of the BCI this year has brought into account whether the economy and business climate could improve in the short term.
“The mood gripping the business climate calls for the business environment to be thoroughly interrogated for factors affecting the local business environment negatively. The Labour Indaba on the 4th November is the start of one such process,” continued the statement.
(READ MORE: SACCI concerned about S.Africa's economic prospects)
In order to improve business confidence, the private sector needs to be convinced that the South African economy is entering a new era of economic growth.
“The Minister of Finance acknowledged the challenges faced in the economy when presenting his medium-term fiscal outlook. However, fiscal policy improvements are but one aspect of a comprehensive package of policy and business environment reforms required to bolster business confidence.”