CAPE TOWN: Business confidence slumped to a 16-year low in May as exports and vehicle and retail sales fell, while a weak rand made imported commodities more expensive.
The South African Chamber of Commerce and Industry’s (Sacci’s) business confidence index (BCI) plummeted to 86.9 last month from 89.9 in April, the chamber said on Wednesday. The low level of 86.9 was last seen in September 1999.
Low business confidence implies lower investment and job creation by the private sector. Sacci noted that while countries around the world were struggling to return to higher levels of growth following the global economic crisis seven years ago, SA’s economic performance was “falling behind both that of Africa and the rest of the world”.
Only four (municipal services, manufacturing, construction of buildings, and real private-sector borrowing) of the 13 subindices that make up the BCI improved last month. Five (exports, imports, vehicle sales, retail sales, and the rand exchange rate) fell, while four (inflation, share prices, real financing cost, and precious metal prices) were unchanged from the previous month.
