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The SACCI’s Business Confidence Index (BCI) continued to decline by 7.7 index points in April 2026 but recovered in May 2026 by 0.5 index points to register 124.1. The BCI was nevertheless still 8.3 index points higher than in May 2025. The BCI averaged 129.0 in the 1st five months of 2026 compared to 120.0 in the 1st five months of 2025.   

The BCI increased by 0.5 index point between April and May 2026 (month-on-month). Between March and April 2026, the decline of 7.7 index points was considerable. It however appears that the negative sentiment caused by the recent soaring crude oil price subsided somewhat in May. The most notable positive impact on the BCI in May was made by the number of new vehicle sales, merchandise export volumes and to a lesser extent by merchandise import volumes. A substantial negative impact on the BCI was made by the decline in overseas tourists while higher inflation’s negative contribution is also of concern.

Despite short-term volatility and downward correction, the SACCI BCI remained a significant 8.3 index points higher year-on-year. It was only higher inflation and high energy prices that marginally affected business confidence negatively if compared to May 2025. 

In the short-term (month-on-month), the broad financial climate has become negative and tougher during May 2026 while real economic activity was positively leaning. Over the medium-term (year-on-year), it was only energy costs and price instability (inflation) that affected the business climate adversely.

The domestic economy continues to be affected by the consequences of the war in the Middle East. Improved ratings regarding South Africa’s creditworthiness and investment, and a stricter Reserve Bank's Monetary Policy stance with the Bank’s latest decision to increase the repo rate by 0.25%-point were in the best interest of economic stability and progress. In general, a more positive view of economic prospects was expressed by rating agencies. These views mainly hinged on fiscal consolidation, declining public sector debt levels and debt servicing.

The problem is that inflation is a process and that the spark led by fuel prices as a basic input to all economic activities, will kindle the inflation process and must be contained coming from whatever source. The impact of the high crude oil price for South Africa was softened by a steady rand exchange rate, especially against the US-dollar. The steady rand and government’s lowering of the fuel levy helped to reduce the effect of fuel prices, restrain inflationary pressure, and be less of a drain on the economy. 

Although the exchange rate and volatility of the rand, share prices, precious metal prices, and credit availability play important roles in business sentiment and business confidence, these indicators reflect expectations rather than lasting economic substance.  The dip in SACCI’s BCI since March 2026 occurs when business expectations changes and exogenous developments dent sentiment.

Issued by SACCI