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The SACCI Business Confidence Index (BCI) for September 2012 was released today at the SACCI Offices in Rosebank, Johannesburg.

The BCI retreated by 3.3 index points from 95.0 in August 2012 to 91.7 in September 2012. The BCI started 2012 with a 0.6 index points decline in the 1st quarter 2012, 2.6 points in the 2nd quarter and 1.5 points in the 3rd quarter of 2012 – a total loss of 4.7 points since the start of the year. With the BCI at 100 in 2010, the 91.7 in September 2012 remains a depressed level for local confidence.

The BCI was 6.7 points below its level in September last year. The indecisiveness of the BCI over the short to medium term heightened in September 2012. Recent developments in the domestic labour market weighed heavily on the BCI.

Only three sub-indices were positive on a month-on-month basis compared to six in August 2012. Both the financial and real economic sub-indices fared worse in September compared to the previous month. On an annual (y/y) basis, eleven of the thirteen sub-indices declined in September 2012 and only two were positive. This is a dramatic turnaround on the situation in August 2012, when nine sub-indices made a positive contribution to the business climate.

SACCI noted with concern the most recent downgrade of RSA government bonds by Moody’s and South Africa’s loss of two positions in the 2012/2013 WEF competitiveness rankings to 52 from 50 out of 144 countries. South Africa’s worst performing competitiveness areas are health, primary education and labour markets. Financial markets and market size is where South Africa’s competitiveness strength lies.

SACCI trusts that policy decisions and implementation by government would be dedicated to turning this decline in competitiveness and credit ratings.

For a full background to this month’s SACCI BCI see the Economic Commentary in the BCI report on www.sacci.org.za.