The South African Chamber of Commerce and Industry (SACCI) said that the November BCI appears to be steering away from the desperate levels recorded over the past six months.
“SACCI is relieved that the despairing mood in the business environment may be losing its grip although challenges like further power shortages could trigger a further bout of poor confidence. A slowdown in the economies of major trading partners as well as low US dollar commodity prices could also affect the business climate negatively,” said SACCI in a statement.
(READ MORE: S.Africa’s business confidence reaches lowest since 1999 )
Month-on-month changes in the sub-indices of the BCI improved for the second consecutive month, but SACCI said these short term changes must continue into the first couple of months of 2015 for a meaningful recovery.
Three of the six financial sub-indices were positive for November, compared to only one in October.
“For a sustained recovery in business confidence, there must be solid and consistent improvements in the business climate,” continued the statement.
“The improvement in the November BCI, is indicative that even the possibility of an improved approach to the challenges facing the economy could trigger a positive response in business confidence. The urgency to change the course of the economy has been well established.”
The Chamber added that it’s concerned the lacklustre performance and populist approaches to addressing fundamental shortcomings in the domestic economy are undermining the performance of the financial system of South Africa.
(READ MORE: SACCI concerned about S.Africa’s economic prospects)
“Moody’s recent downgrade of government’s debt as well as major banks due to poor growth prospects and the possibility of government debt rising in relation to gross domestic product, are a case in point.”
However, the improvement in the November BCI could possibly signal an improved approach to dealing with the challenges of the economy.
“The urgency in changing the course of the economy has been well established but the pace of response remains slow,” said SACCI.