After a sharp dip in April, business confidence in SA recovered modestly in May — though it remains well below the highs recorded earlier in the year.
The South African Chamber of Commerce and Industry’s (Sacci’s) bimonthly Business Confidence Index (BCI) rose to 115.8 in May from 114.9, following an 8.6-point decline in the previous survey.
Sacci said the recovery in May was supported by a firmer rand, higher share prices on the JSE and elevated global prices for gold and platinum. However, declines in merchandise imports, tourism inflows, manufacturing output and the real value of building plans passed offset some of these gains, painting a mixed picture in the short term.
While still eight index points higher than in May 2024, the latest reading suggests that the strong momentum seen earlier this year is beginning to ease.
Six of the 14 sub-indices improved month on month, six deteriorated and two remained unchanged.
The BCI had climbed steadily from 107.8 in May 2024 — the month of SA’s national election — to a peak of 125.8 in February 2025. Since then, however, the index has edged lower amid global trade tensions, weak export performance and protracted uncertainty over fiscal policy.
Sacci said month on month, “the financial environment was in support of the business climate, but subdued real economic activity dampened the business environment.”
Over the medium term [year on year], “the sub-indices on real economic activity and the financial environment were evenly poised on having a positive effect on business confidence,” the chamber said.
The finance minister tabled the third iteration of the national budget in May, after two previous attempts failed to gain sufficient support from political stakeholders. The fiscal framework passed the committee stage, and is scheduled to be debated in the National Assembly on Wednesday.
This iteration of the budget included no changes to personal income tax brackets, rebates or VAT but raised fuel levies and sin taxes.
Government also downgraded its growth forecast for 2025 to 1.4%, from 1.8% in earlier budget iterations.
Sacci warned SA’s low savings rate, weak 0.8% first-quarter GDP growth, and global disruptions to trade — particularly from US tariff actions — posed growing risks to investment and confidence.
“[The] growth … is far below what is needed to address unemployment and accommodate inclusiveness. SA should attend to matters that scare off investors — especially foreign investors, given SA’s insufficient savings record,” Sacci said, calling for urgent reforms to reduce red tape, cut wasteful public spending and improve productivity.
Despite these challenges, the index remains significantly above levels seen in much of 2023.
“What happens with the Trump tariffs will have an effect on the next survey,” said Richard Downing, an independent economist affiliated with the survey.
The pause on the so-called Liberation Day tariffs is expected to be lifted in July.
“It will depend on the extent to which [the US] implements those tariffs, but international trade is critical for SA’s economy,” he said.
While Sacci does not explicitly measure the impact of the national budget, Downing said indirect effects — such as the effect of bracket creep on consumers — could weigh on the next survey results.
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