Sacci Business Confidence Index declines in November

Sacci said in a statement that the index had declined 2.1 points to 92.8 in November, weighed down by factors such as declining trade volumes on both the export and import fronts. 

But what is really striking is that it is the first month this year which scored less confidence than the corresponding month in 2020 – a year in which the economy contracted a massive 6.4% in the face of the pandemic.  

“It is telling us that business confidence is quite low. Every time you gain momentum, something happens – such as the July mayhem,” Sacci economist Richard Downing told Business Maverick. 



The gap between monthly readings in 2021 and 2020 have at times been a chasm. In April of this year, the BCI was at its 2021 peak of 97.0, almost 27 points above the 70.1 reached in April of last year – the hardest month of the hard lockdowns. 

But as Downing noted, the index has not been able to maintain momentum or traction over the past few months. It got knocked back three points to 93.2 in July, a month marred by the wave of looting and riots that swept Gauteng and KZN. It continued to decline in August and September, while remaining well above the levels reached in those months in 2020. It managed a rebound in October.

And now, the November reading is not just down on the previous month – it is 0.6 points lower than the November 2020 level of 93.4. 

This sapping of confidence underlines the fragility of the country’s economic recovery. South Africa’s gross domestic product (GDP) declined 1.5% in the third quarter, largely because it was clobbered by July’s unrest as well as the pandemic’s third wave. 

The economy is supposed to be growing again this quarter, and it probably has been, but it is hardly barreling along – not if business confidence was higher in November last year than the same month this year. 

Meanwhile, retail trade sales for October were disappointing, and there are headwinds aplenty: load shedding, the collapse of international tourism here because of the emergence of Omicron, and the continuing failure of the government to bring in structural reforms. DM/BM

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