Business sentiment wanes in South Africa as economic uncertainty lingers

SENTIMENT in the business sector in South Africa has remained volatile despite a minor rebound following fears over US trade policy, including former President Trumps threat to impose 30% tariffs.

- YOGASHEN PILLAY

The latest release of the Business Confidence Index (BCI) by the South African Chamber of Commerce and Industry (Sacci) has revealed a complicated landscape for businesses, as the index experienced a notable fluctuation in recent months.

The BCI dropped by 8.6 index points in April to a measure of 114.9, before recovering slightly by 0.9 index points in May, culminating in a score of 115.8.

Waldo Krugell, economics professor at North-West University, said that this decline was in line with other high-frequency data indicators.

“Basically, it's businesses that are now more pessimistic about the prospects for doing business during the course of this year,” Krugell said.

“This loss of momentum speaks to consumers not spending as much as expected. Even in the investment numbers last week we saw a decline in investment indicating people are less confident and expect a slowing of the economy.”

Despite this minor rebound, Sacci highlighted that the BCI still stands 8.0 index points higher than the same period last year, signalling a year-on-year improvement in business confidence.