The upward momentum of the BCI since September 2018 appears to have flattened. File Image: IOL

CAPE TOWN – The SA Chamber of Commerce and Industry (SACCI) on Thursday announced that the Business Confidence Index (BCI) for November 2018 measured 96.1 and had increased by only 0.3 index point month-on-month. 

BCI is an economic indicator that measures the amount of optimism or pessimism that business managers feel about the prospects of their companies.

The BCI was one index point higher than in November 2017. The upward momentum of the BCI since September 2018 appears to have flattened and it is the second time this year that the business climate hesitated after encouraging steps to develop and enhanced business confidence. 

In November 2018, three sub-indices were positive month-on-month, three were unchanged, and seven declined on their October levels. Four of the seven real-activity sub-indices had a negative month-on-month impact on the BCI and three of the six financial sub-indices were negative in November 2018. 

The November BCI level was supported by improvements of merchandise export and import volumes, the real value of building plans passed and manufacturing output. The year-on-year decline in the all-share price index of the JSE, higher inflation, lower precious metal prices, and stagnant real retail sales weighed the most negatively on the BCI in November 2018.

South Africa's economy continues to face various limitations due to inadequate growth, growing public debt, capital outflows, world trade tensions, fiscal constraints and several socio-political challenges that prevent optimal economic performance.

The world economy is moving ahead in tandem with the Fourth Industrial Revolution, SA will have to balance its politics and the cost of becoming and remaining an investment destination. There will be pressure in changing production processes in the different sectors and also the cost and efficacy of production

It has become evident that South Africa has entered a process and protracted period of economic recuperation and implementation given the assessment as indicated in the MTBPS in October. The flattening of momentum in business confidence must be addressed in order to create a situation where investor confidence could be nurtured.

BUSINESS REPORT ONLINE