On Wednesday, The South African Chamber of Commerce and Industry (SACCI) released the results for The SACCI Business Confidence Index (BCI) for May 2015 which showed a very bleak outcome for South Africa.
According to SACCI, business confidence slipped to a 16-year low as the SACCI BCI slumped to 86.9 in May 2015 compared to the level of 86.8 registered in September 1999.
Comparisons with more recent figures show the BCI two index points lower than in May 2014 and three index points lower than in April 2015. The 86.9 for May 2015 is lower than the lowest 2014 level of 87.9 in July 2014.
Impact on the economy
SACCI has attributed these results to the current electricity crisis which is having a significant negative impact on sector output such as manufacturing and electricity.
Load shedding is also greatly disruptive to the services sector. This is of great concern to SACCI and notably to small and medium size businesses.
SACCI stated that despite the world economy finding it tough to expand at a similar rate than before the ‘Great Recession’ of 2007/08, it is evident that only some countries are succeeding in improving their performance. South Africa’s economic performance is falling behind both that of Africa and the rest of the world.
Unattractive investor climate
According to SACCI the country’s economy is in a very delicate and peculiar situation. Although it is in severe need of foreign capital for financing struggling public sector institutions, infrastructure and compliment overall local fixed investment, the business and investor climate are not convincing.