Business industry body the South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) increased gradually from a depressed level of 107.8 in May 2024 to a record level of 125.8 in February.

The February BCI is an 18 index point surge on May 2024, when the country held national elections, Sacci points out.

It says that while the March BCI lost 2.3 index points on February, it was still 8.8 index points higher than in March 2024.

The average of 123.1 for the BCI in the first quarter of the year compared well with the average of 113.9 for first quarter of 2024, Sacci avers.

The most positive short-term impacts on business sentiment in March were caused by increased tourism and exports, and lower inflation.

Fewer imports, a weaker rand against the major trading and investment currencies and declining share prices on the JSE, imposed the largest negative month-to-month impact on business confidence.

The BCI also kept to the improved year-on-year levels in February and March.

Increased inward tourist numbers, more new-vehicles sold, and lower inflation were the main contributors to the enduring positive business sentiment compared to a year ago.

Declining merchandise export volumes, real interest rates that remained relatively high and manufacturing output which declined on a year ago, weighed negatively on the business climate.

With the new US administration, individual countries came under scrutiny for adherence to notably free and fair international trade and investment, Sacci says.

It indicates that geopolitical tensions and the adherence to non-alignment based on international economic and business relations by individual countries could have considerable economic and business implications.

With South Africa registering economic growth of 0.6% in 2024 and the prospect of subdued real growth of between 1% and 1.5% this year, the country needs global business opportunities to improve its growth potential and create jobs, Sacci emphasised.

Despite mounting global uncertainties, South African business and financial markets managed the challenging circumstances with relative calm, Sacci points out.

While business confidence in South Africa remained relatively high and stable after strong improvement up to February, the entity warns against complacency.

Global uncertainty, the possibility of trade disruption, tariff barriers and adapting to a changing global environment have become critically important, it highlights.