JOHANNESBURG – Business confidence climbed to its highest level in three years, data from the South African Chamber of Commerce and Industry (Sacci) show.
Sacci on Wednesday released the business confidence index for May, which ticked up to 97 points from 94.7 previously. This is the highest level recorded since March 2018, when the business confidence index recorded 97.6 points.
Business confidence has been on a recovery path since harsh lockdown level 5 restrictions were implemented in March 2020 to slow the spread of Covid-19. Confidence levels hit a low of 70 points in May 2020 but have since climbed up to the mid-1990s. Sacci attributed improvements to confidence in part to an increase in export volumes, and high prices for commodities.
In addition, rand strength, supported by the trade surplus, is counteracting rising oil prices.
“South Africa’s export-led recovery should give room to address some of the structural deficiencies in the economy,” the report read. Sacci flagged unemployment as an ongoing major concern to be addressed.
Constrained real retail sales, slower real credit extension, uncertain energy supply and fewer plans for new buildings are negatively impacting the business climate, compared to a year ago. Sacci said the “tight financial situation” of many businesses can have a “real adverse” outcome for many small businesses and households. Citing the South African Reserve Bank’s financial stability review, Sacci said that high household and public sector debt levels could impact the pace of economic recovery. – FIN24.