DEAR MEMBERS

Find below and attached SACCI Press release.

SACCI PRESS RELEASE - BUSINESS CONFIDENCE INDEX (BCI) – November 2022

Embargo: 11:30 – 13 December 2022

Relatively Stable Business Confidence

During November 2022 the SACCI Business Confidence Index (BCI) recorded a reading of 110.9 and though the BCI declined by 1.4 index points to 109.4 in October, it again recovered the 1.4 index points in November 2022. The BCI was 3.6 index points higher in November 2022 than in November 2021 and 2.9 index points up on November 2020. The average of 109.0 for the SACCI BCI in the first eleven months of 2022 was slightly higher than the 108.7 for the corresponding period in 2021 – a relative stable situation.

The unexpected performance of business confidence during 2022 was affected by a combination of global and local economic developments. However, the present level of the SACCI BCI indicates that the disruptive effects experienced during and after Covid in 2020 and in 2021 has been largely overcome.

The Covid aftermath was replaced by global and domestic events that carried further disruptions in 2022 and risks to the business fraternity. The erratic movement of the SACCI BCI in 2022 from a high of 112.0 in February to a low of 103.2 in May – a spread of 8.8 index points – in itself mirrors the risk and uncertainty surrounding the business climate in South Africa during 2022.

Eight of the fourteen sub-indices monitored had a positive or neural impact on the BCI between October and November 2022. Of these eight sub-indices, increased new vehicle sales, share prices on the JSE, and manufacturing output made the largest positive short-term (month-to-month) impact on the BCI in November. On an annual basis, i.e. over the medium-term (year-on-year), increased inbound tourism, increased new vehicle sales and higher merchandise import volumes had a notable positive effect on the BCI.

Import and export volumes both experienced increased activity in the first nine months of 2022 by increasing significantly by 15.9% y/y and 9.6% y/y respectively with foreign trade activity thus playing an important role in support of business confidence. South Africa’s real GDP grew by 2.3% y/y in the first three quarters of 2022. The tertiary sector increased by 4.1% y/y over this period; the secondary sector declined by 0.9% y/y; and the primary sector dipped by 6.1% y/y.

It appears that economic performance contributed to the relative stability of business confidence. Investor confidence should benefit from the latest economic performance.

For a full background to this month’s SACCI BCI see the full BCI report on www.sacci.org.za.