Difficult Business Climate
11 September 2019
The BCI for August 2019 declined to 89.1 from 92.0 in July 2019 – a decrease of 2.9 index points. It is exactly 1 index point above the lowest ever recorded BCI level achieved in April 1985 (88.1). It is necessary to point out that in the last two years of 2017 and 2018, the BCI was at its lowest in the August months, and the trend is true so far in 2019, as the figure is the lowest it has been so far in 2019. The BCI for August 2017 and 2018 were 89.6 and 90.5 respectively.
Seven of the thirteen sub-indices used in compiling the SACCI BCI deteriorated between July 2019 and August 2019, four improved, and two remain unchanged. Four of the seven economic activity indicators declined on their July 2019 levels and three of the six financial pointers used for the composite BCI, deteriorated month-on-month.
On an annual basis, five of the seven economic activity indicators declined on their August 2018 levels while five of the six financial pointers were either positive or unchanged year-on-year; indicating a relative stable financial environment compared to August 2018.
Negative monthly movements occurred due to a decrease in merchandise export volumes, a weaker rand exchange rate weighted against major trading and investment currencies, and declining all-share prices on the Johannesburg Securities Exchange (JSE). Increased merchandise import volumes and the higher US dollar price of precious metals made a modest but positive contribution to the BCI in August 2019.