SACCI PRESS RELEASE – BUSINESS CONFIDENCE INDEX (BCI) FOR SEPTEMBER 2019
A Window of Opportunity
SACCI’s BCI (2015 = 100) recovered from 89.1 index points in August 2019 to 92.4 in September. The BCI improved by 3.3 index points in September from August, but was still 0.9 points below the BCI level of September 2018.
The September level of the BCI is the highest level since June 2019. The average for the BCI for the first nine months of 2019 was 92.6 compared to 95.4 for the corresponding period of 2018. The month-on-month recovery of 3.3 index points in September 2019 (albeit from a lower level), is similar to the month-on-month recovery of January 2018, i.e. after the majority party’s new leadership was elected.
Particular positive monthly movements were notable in increased merchandise export volumes (from a subdued level), a stronger rand exchange rate weighted against major trading and investment currencies, increased new vehicle sales, and increased real value of building plans passed. A small negative effect on the BCI was caused by higher core inflation.
The annual decline of 0.9 index points between September 2019 and September 2018 was mainly due to reduced merchandise export volumes, followed by higher core inflation, a notable lower all-share price index on the JSE, and a below trend manufacturing output. Positive annual contributions in September came from the higher US dollar price of precious metals, energy supply – the latter mainly owing to a decline in the crude oil price from some 79 US dollar in September 2018 to about 62 US dollar in September 2019, and a stronger rand exchange rate.
Apart from the SACCI BCI that suggests a possible about turn for the business climate in September 2019, there are indications that the economy may have hit a trough and could obtain some stability albeit at a subdued level.
The present improved business climate calls for continued positive action to retain the business and economic momentum and provide certainty on economic policy direction. It has become imperative to use this window of opportunity to implement proposals for economic restructuring and with the upcoming medium term budget setting the tone for an economic turnaround.
For a full background to this month’s SACCI BCI see the full BCI report on www.sacci.org.za.
For more information, contact:
Alan Mukoki SACCI CEO 082 551 1159
Richard Downing SACCI Economist 082 822 5566
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Author: Derrick Markotter
RCCI Webmaster Derrick runs a boutique web marketing agency, IdealMedia Marketing.