Cautionary Business Mode
6 March 2019
SACCI released the Business Confidence Index (BCI) for February 2019 at its offices in Illovo, Johannesburg.
SACCI’s Business Confidence Index (BCI) declined in February 2019 to 93.4. This is 1.7 index points lower than in January 2019 and 5.5 points below the February 2018 BCI level of 98.9. The level of the BCI during the first few months of 2018 was to a large extend driven by expectations of an improved business climate.
Business confidence, however, deteriorated throughout 2018 as the economy and the business climate came to terms and realised that the structural challenges in the economy lie beyond short-term remedies.
Five of the thirteen sub-indices of the SACCI BCI improved on their January 2019 readings, five declined and three were unchanged. The main positive month-on-month effects on the BCI were increased merchandise export volumes, higher share prices on the JSE, and more real credit extended to the private sector. In February 2019 the year-on-year decline in the BCI exceeded the decline of January 2019. Two of the seven real-activity indices made positive year-on-year impacts on the BCI in February 2019, while only the real cost of finance (by default) had a positive year-on-year effect on the business climate compared to a year ago. Four of the six financial sub-indices had negative year-on-year impacts on the business climate with real private sector credit unchanged on a year ago.