Johannesburg - The South African Chamber of Commerce and Industry’s Business Confidence Index suffered a setback in May.
This comes on the back of a gradual recovery to April from a historic low level of 79.6 in December 2015, which was undone last month, it says in a statement released Tuesday.
The BCI that came in at 79.3 in May 2016 was 7.6 index points below the May 2015 level and declined by 3.2 index points on April 2016. Though the BCI was widening the gap on 80 up to April, the advances were brittle in the wake of a delicate economic situation.
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In a statement, SACCI says setbacks in the real business environment were evident in May 2016 with four of the seven sub-indices declining on April 2016, while the financial climate deteriorated even more as there were no positive month-on-month movements in May 2016.
The annual BCI comparison suggests a tighter business climate in May 2016 than a year ago with financial circumstances and the real economy being worse off.
The month-on-month changes of the sub-indices of the SACCI BCI had fewer positive movements in May 2016 than in April 2016.
The largest positive monthly contributions to the BCI came from building plans approved and merchandise export volumes.
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Seasonally adjusted merchandise import volumes had the largest negative m/m effect in May 2016 followed by real retail sales and a weaker weighted rand exchange rate against the US dollar, euro and the British pound.
The largest negative year-on-year contribution to the BCI in May 2016 came from the rand exchange rate followed by new vehicle sales and all-share prices on the JSE. The only positive year-on-year impact on the BCI in May came from municipal services.
The main matters that could seriously affect the immediate South African economic conditions and the business climate are the announcements by Standard and Poor’s and Fitch regarding South Africa’s sovereign credit rating, says SACCI.
S&P last week left SA’s rating unchanged at a notch above junk, while Fitch will make its pronouncement on Wednesday.
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