Illustration photo of South African rand

Johannesburg – The South African Chamber of Commerce and Industry says positive developments in the economy informed April’s business climate.

In a statement released on Thursday, the chamber notes its Business Confidence Index (BCI) contains sub-indices that instantly reacted to events at the end of March into April pertaining to political developments, policy uncertainty and lower credit ratings.

At the end of March, former Finance Minister Pravin Gordhan was recalled from an international roadshow to the UK and US. He was subsequently axed and replaced by Malusi Gigaba, which led to SA being downgraded to junk by S&P and Fitch.

SACCI notes, however, that nine of the 13 sub-indices making up the BCI were still affected by the business climate prior to the referred events.

“Positive developments in the economy therefore still informed the business climate in April 2017 and were vibrant enough to carry the positive business climate forward into April 2017.”

The index improved by 1.1 index points to 94.9 in April 2017 from 93.8 in March 2017. However, the April 2017 BCI is 0.6 index points lower than in April 2016.

SACCI says the positive month-on-month change in five of the thirteen sub-indices of the BCI lifted the index in April 2017, although four of the five sub-indices reflected positive business conditions prior to April.

Three of the seven real activity sub-indices (all but new vehicle sales being prior April conditions) were positive. Four of the six financial sub-indices (three sub-indices prior April conditions) either improved or remained unchanged in April.

However, it also notes the year-on-year movements of the sub-indices show that the business climate deteriorated from April 2016 to April 2017.