The Business Confidence Index (BCI) reading of 89.3 was the lowest since the 85.7 of September 2020, the South African Chamber of Commerce and Industry (Sacci) said in a statement on Tuesday. This marked the third consecutive month of decline, a clear signal that business confidence in South Africa is eroding. 

Sacci noted the usual suspects of late: the Russian invasion of Ukraine, rising inflation and interest rates on the domestic and global fronts, the IMF’s sharp downward revision in global growth projections and the KZN floods.  

Load shedding didn’t get a mention in the release. It may be the case that power cuts are simply now a given, like the sun rising in the East each morning. But it is clearly weighing on confidence and investment decisions. 

The index is different from others in that its range is not zero to 100. It is measured against 2015, which equals 100. It is revealing to note that the index has not cracked 100 since October 2015. And at 89.3, it is not much higher than the 86.5 average for 2020, which was simply a catastrophic year for the economy. 

It’s also telling that it never once fell below 90 in 2021. 

Business confidence is going south after showing signs of recovery in the first quarter of this year, when the economy grew by a surprising 1.9% on a quarter-on-quarter basis. 

So the Sacci BCI readings add to a swelling body of data and evidence that economic growth has slowed significantly this quarter. 

Are there any bright spots? Among Sacci’s “business climate indicators”, vehicle sales and construction both put in year-on-year gains. 

There are other indicators pointing to a rebound in construction, which is welcome as it is labour intensive and is also a sign of investment trends. Building stuff counts as investment. 

But overall, the business outlook is indeed bleak as winter sets in. DM/BM