Filomena Scalise

Business confidence, as measured by the South African Chamber of Commerce and Industry (SACCI), dipped to 97.1 in January after increasing by 1.7 points in December 2011 to 99.1.

This is the lowest level for the BCI since May 2010 when the BCI registered 96.7. The January 2012 BCI is 6.0 index points below the January 2011 level.

SACCI said the decline in the BCI between December 2011 and January 2012 was a consequence of six of the sub-indices being negative in January 2012 compared to only three sub-indices reading negative in December 2011.

The financial environment was supportive of positive business sentiment with five of the six financial sub-indices being either positive or neutral. Only two of the seven sub-indices in the real sphere of the economy had a positive impact on the BCI between January 2012 and December 2011.

On an annual basis, fewer sub-indices were negative although the sub-indices reflecting the financial environment were less favourable than in December 2011.

“The impact on the BCI from inflation, share prices and the exchange rate of the rand, however, could be more positive in 2012 than was the case in 2011. The real economy may experience more challenging times ahead as the low growth scenario in 2012 will impact negatively on real economic activity,” SACCI cautioned.

It added: “Various challenges issue cloud the economic and business outlook for 2012 including lower economic growth, unemployment, higher inflation and weak municipal service delivery. Addressing and managing these issues will have a profound effect on the business environment and business mood in 2012. The upcoming State of the National Address and National Budget Announcement provide the opportunity to bring about improvements. Both should promote policy consistency in the public sector, commitment and coherency in all government spheres, and lead to enhancements in the business environment.” - I-Net Bridge