The SA Chamber of Commerce and Industry (SACCI) Business Confidence Index dropped by 2.3 index points to 84.6 in June from 86.9 in May.
This level is 5.1 points lower than in June 2014 and is the lowest level since the 83.9 of January 1999 – a 16 and a half year low.
The average of 88.8 for the BCI over the first six months of this year was the lowest since the first half of 1999 when the BCI measured 86.2.
Month-on-month real activity was negative in total with all seven sub-indices declining. Four of the six financial sub-indices were negative y/y, one undecided and one positive. Five of the real activity sub-indices were negative, two were positive while increased lending to the private sector slightly improved the financial environment.
The domestic and world economic climate remains uncertain with advanced economies and China, except for the US economy, failing to provide the necessary inducement. The Greek deliberations on austerity packages that broke down, contributed to uncertainties in dealing with the European Union.
The Chamber says over-borrowed European member countries in general and methodologies to rearrange economies to return to sustainable growth and prudent financing, are the essence of the problem. This also reflects on countries heading for similar problems in the future and their prevention.
The ‘Greek Tragedy’ has again brought the attention of the world to appropriate policy objectives and reality. Toying around with ideologies appears to be a major distraction that could lead an economy and a population to disaster or to a ‘no escape route’ from harsh adjustments. The low confidence levels in South Africa are signalling a business climate that does not accept or appreciate private initiative of the individual or business seriously enough, warns the Chamber.