The index leaped from 96.4points in December, reaching its highest level in two-and-a-half years.
In October, 2015 the BCI measured 102.3points, while in 2015, the BCI averaged 100 index points.
Viewed on a yearly basis, the BCI was two index points higher than the 97.7points in January, last year.
SA Chamber of Commerce and Industry economist Richard Downing said short-term economic and market indicators showed that the pace and direction of change reflects a more upbeat business climate.
“There is the expectation that the new leadership will be more pragmatic, with predictable business and economic policy options,” Downing said.
“Although the present business confidence carries a great deal of positive sentiment, the investment environment will benefit most from this sentiment to enhance sustainable economic growth and employment prospects.”
Last year, the BCI averaged 94.4 index points.
Downing said 10 sub- indices had improved from what they were a year ago, while two remained unchanged and one posted a negative result.
He said the largest annual positive contributions to the business climate were from lower inflation, increased merchandise export volumes, and improved real retail sales.
The higher real cost of financing was the only annual negative effect on the BCI.
Annabel Bishop, the chief economist at Investec, said repairing business confidence would stimulate both foreign direct investment and domestic fixed investment.
“As investor sentiment improves so does fixed investment, if the economic growth outlook is increasingly positive. This year is expected to see global FDI flows reach $1.8trillion (R21.68trln) as business confidence improves,” Bishop added.
The International Monetary Fund (IMF) last month revised South Africa’s growth prospects for 2018 and 2019 down to 0.9percent for each year, after the previous forecasts of 1.1percent for 2018 and 1.6percent for 2019.
Downing said if the present local positive momentum and policy changes could be effected, growth for South Africa could well exceed the IMF forecasts.
“This could spur further reforms,” he pointed out.
- BUSINESS REPORT