Business confidence declines amid political tension
The South African Chamber of Commerce and Industry (SACCI) says heightened political tensions, economic policy uncertainty and lower credit ratings is continuing to have a negative impact on business confidence.
SACCI says the BCI declined to the lowest level of 93.2 so far in 2017.
"The BCI declined by 1.7 index point from 94.9 in April 2017. However, the May 2017 BCI is 1.4 index points higher than the exceptional low 91.8 of May 2016," says SACCI CEO Alan Mukoki.
Mukoki says this is largely due to lower merchandise import volumes, lower real value of building plans passed and higher real financing costs.
"The stronger rand exchange rate and lower consumer inflation made the most notable positive year-on-year contributions to the BCI between May 2017 and May 2016," says Mukoki.
Mukoki says the news that the economy is in a technical recession confirms that a tough road lies ahead for the business sector.
"The sub-investment grade since the 2nd quarter of 2017 makes it essential that a policy approach be followed that enhances business and investor confidence and promote economic growth. It has become important to consider a workable normative economic approach to the socio-economic challenges of unemployment, poverty and inequality."