South Africa's business confidence index sees significant growth

Johannesburg (The Uttam Hindu): Business confidence in South Africa has shown significant improvement since the establishment of the Government of National Unity (GNU) in June 2024, according to the South African Chamber of Commerce and Industry (SACCI). The chamber's Business Confidence Index (BCI), released on Tuesday, highlights positive shifts in business sentiment across various sectors, showing growth on a monthly, annual, and six-month basis.The increase in business confidence follows the May 2024 elections, which resulted in no single party securing an outright win. This led to the formation of the GNU, a coalition of 10 political parties. SACCI noted that the broader political representation within the national government has contributed to a more positive outlook on the country's economic future. This positive sentiment has helped stabilize the business climate, boosting overall confidence. Since the formation of the GNU, the BCI has steadily risen, from 107.8 in May 2024 to 118.1 in November 2024. Over the year leading up to November, the BCI improved by 6.6 points, marking the largest year-on-year improvement in a single month since the end of COVID-19 restrictions in December 2022. The chamber credited increased tourist arrivals, higher precious metal prices, and stronger new vehicle sales as the main drivers of this positive change.

However, SACCI also highlighted some challenges, with lower merchandise import volumes being the main negative factor affecting the BCI in November. Additionally, the chamber expressed concern over South Africa's slow economic growth of just 0.4% year-on-year for the first nine months of 2024, pointing to the difficulties facing the economy.

Despite these challenges, SACCI remains optimistic, citing the upward momentum in business confidence as a sign of the private sector’s resilience and commitment to improving economic performance. The chamber also emphasized the need for greater public-sector efficiency to support these efforts. According to SACCI, a strong partnership between the public and private sectors could help transform the growing business confidence into stronger investor confidence, sustainable economic growth, and job creation.