Business confidence in SA slipped in March as the energy supply shortfall, higher interest rates and the volatile share market dented sentiment, the survey conducted by the SA Business Chamber of Commerce and Industry (Sacci) showed on Tuesday.
The business confidence index (BCI) declined by 0.6 index points to 111.3 in March versus 111.9 recorded in February. The reading is fairly consistent with other economic indicators pointing to the crippling effect of electricity rationing on businesses.
The rising cost of capital is a concern to businesses at a time when consumers are coming under increasing pressure from high inflation and high interest rates.
The Reserve Bank has hiked rates by a cumulative 425 basis points to 7.75% since the hiking cycle started in November 2021 in an attempt to bring inflation back to the midpoint of its 3%-6% target band.
The JSE was volatile during the review month, affected primarily by global events, including the collapse of the US-based Silicon Valley Bank.
Four of the 14 sub-indices of the BCI turned negative, while five were neutral. The silver lining was in the increase in the merchandise of export volumes, as well as precious metals, suggesting that SA businesses were benefiting from the reopening of China, which is world’s largest consumer of commodities.
Inbound tourism was also a bright spot, indicating foreign tourists were taking advantage of a weaker rand exchange rate.
“The business environment remains sensitive as a number of factors are likely to have an impact on the business ecosystem going forward,” CEO Alan Mukoki said in a statement.
On a year-on-year basis, the BCI rose by 0.8 index point, the survey showed.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.