South Africa continues to struggle with depressed business confidence levels. The South African Chamber of Commerce and Industry (Sacci) says its Business Confidence Index (BCI) has declined 1.3 index points to 92.0 index points in July.
This is the second lowest level of the index since January 2019.
Sacci says the real economic activity business climate remained challenging. They, however, say the financial conditions pertaining to the business climate improved due to external factors like higher commodity prices and a lower repo-rate.
Merchandise import and export volumes made negative contributions to the business climate.
Sacci says the recently released unemployment figures in the second quarter are the most telling indicator of the subdued performance of the South African economy.
The official unemployment rate stands at 29%, the highest in 11 years.
Sacci says the high level of optimism, that existed immediately after the election of President Cyril Ramaphosa, is being affected by indications that the ruling party is divided on policy, political and factional lines.
It says these divisions have a direct impact in government’s efficiency and effectiveness in implementing its policies and managing the fiscus.
The organisation says the poor financial position of state-owned enterprises and municipalities is also a huge cause for concern.