According to the South African Chamber of Commerce and Industry (SACCI), the January 2015 BCI level is the slowest start to the index over the last 18 years since the 89.2 in January 1997 and does not project an improved state of affairs for the business mood in 2015.
“The improvement in the BCI in November 2014 appeared to be a random increase as suggested by the return to levels below 90 in December 2014 and January 2015,” read SACCI’s statement.
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“The potential for serious disruptions of the economy and business are already present and will not only restrain economic activity, but may set the economy on an indifferent course in 2015."
The chamber added that no clear short-term trend from the individual sub-indices of the BCI could be established on a month-on-month basis.
“Two financial and three real activity sub-indices were positive month-on-month – similar to December 2014. The low business confidence was spread across activities with seven of the 13 sub-indices that were negative year-on-year,” added SACCI.
According to the chamber, the overall financial climate is slightly better compared to the year-on-year changes in December 2014 with the weighted rand exchange rate improving and more credit being made available in January 2015 than a year ago.
The chamber said, the pace of developments in the global and local economy at the start of 2015 could be described as exciting and/or perturbing – for better or for worse.
“A number of major developments could be crucial to the economic and business climate in 2015 and closer to home there are continuing high-risk disruptions to the economy and businesses, but also some possible supportive developments,” added the organisation.
“The net impact of these developments is feeding negative economic and business attitudes. The uncertain environment will contribute to a further decline in business and investor confidence. It is therefore of the utmost importance that the upcoming Budget give a reassurance of a consistent and business enhancing policy framework."
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The chamber also said, the trend in South Africa’s economic growth and investment performance does not provide space for further toiling and squabbling about the way forward.
“The evidence suggests the appropriation of the best manpower and most efficient utilisation of capital resources. This might inspire investor and business confidence for the future.”