Sentiment amongst business managers fell further in May as the election outcome weighed on investor confidence. SACCIs Business Confidence Index fell by 1.1 points in May to 107.8 points from 108.9 points in April. This shows a decline of 6.9 points over the two months.
The lower sentiment among business managers was driven largely by a decline in overseas tourist numbers and lower import volumes. SACCI says the formation of the new government will largely determine the future course of business confidence.
At least three sub-indices contributed negatively to the business climate, including energy supply and manufacturing. The decrease in foreign tourists and import volumes weighed heavily on the BCI in May. While some positivity came from merchandise export volumes and new vehicle sales.
Recent national and provincial elections had notable effect on business confidence during April and May 24th. The BCI declined by 5.8 index points in April and further on to 107.8 in May. Its a decline of 6.9 index points over the two months. The formation of the new government will to a large extent determine the future course of business confidence and the other business climate will be influenced in the short term, thats month to month. Overseas tourists and merchandise export volumes sold played a positive role, says SACCI Economist, Richard Downing.
On a year-on-year basis, the SACCI BCI suggests a probable regressive business climate due to possible unwarranted political developments. Downing says political developments are of special concern given their potential effect on economic policy and the business climate.
