South Africa’s business climate deteriorated in May to its weakest level in 16 years, reflecting the domestic economic slowdown and electricity shortages, lack of policy direction and experimenting with unviable policy options, and a still feeble recovery of the world economy, the South African Chamber of Commerce and Industry (SACCI) said in a statement.
The Business Confidence Index (BCI), produced by SACCI, lost 3.0 points m/m to 86.9 in May, its lowest level since September 1999. It was by 2.0 points below its year-ago level and by 3.1 points below the average for 2014. The index averaged 89.6 in the first five months, compared to 91.3 in the same period last year.
South Africa is in dire need of foreign capital for financing struggling public sector institutions, infrastructure and compliment overall local fixed investment, but the business and investor climate are not convincing, SACCI said. A possible outflow of capital may become a harsh setback for longer-term economic performance, it warned.
|Impact of the BCI sub-indices on the overall BCI||May-15, m/m||April-15, m/m||May-15, y/y||April-15, y/y|
|Physical activity sub-indices|
|Construction - buildings||+||o||+||-|
|Real private sector borrowing||+||+||-||o|
|Real financing cost||o||-||o||o|
|Precious metal prices||o||o||-||-|
|Rand exchange rate||-||+||-||o|
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