Embargo: 11:30 – 16 April 2025
Upholding Positive Business Sentiment
Positive business sentiment was served by improved business prospects since June 2024. The improved sentiment gained traction and is replicated by the economic and financial sub-indices from which the composite SACCI Business Confidence Index (BCI) is compiled.
The BCI increased gradually from a depressed level of 107.8 in May 2024 (month of elections) to a recent record level of 125.8 in February 2025. The February 2025 BCI is an 18.0 index point surge on May 2024. Though the March 2025 BCI lost 2.3 index points on February 2025, it was still 8.8 index points higher than in March 2024. The average of 123.1 for the BCI in the 1st quarter of 2025 compared well with the average of 113.9 for the 1st quarter of 2024.
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 SACCI BCI also kept to the improved year-on-year levels in February and March 2025. 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.
The new administration of the United States of America entered the world’s economic and business fraternity in 2025 with a different and abrupt approach to restore and enhance the USA’s domestic and global interests. Individual countries came under scrutiny for adherence to notably free and fair international trade and investment. Geo-political tensions and the adherence to non-alignment based on international economic and business relations by individual countries could have profound 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% in 2025, South Africa can ill afford to neglect global business opportunities to improve its growth potential and create jobs.
The fiscal predicament in which South Africa finds itself at present is best captured by the trend in government debt. The fiscal dilemma is, however, exacerbated by financing recurrent expenditure by borrowing. The postponement of the 2025/26 Budget in February 2025 was a unique opportunity to reset the slope to South Africa’s economic future.
With the postponement of the Budget in February 2025, SACCI expressed concern as it could lead to uncertainty and feed the perception of political instability in government. SACCI nevertheless raised the hope that there would not be an increase in any direct or indirect taxes as the costs of doing business would be retrogressive and detrimental to business confidence, economic growth, and would worsen unemployment. On March 12, 2025, the Minister tabled revised budget proposals for the 2025/26 Budget, of which the Budget framework was not yet approved by Parliament when the March 2025 SACCI BCI was compiled.
Despite mounting global uncertainties, South African business and financial markets handled the challenging circumstances with relative calm. Although business confidence in South Africa remained relatively high and stable after strong improvement up to February 2025, there is no room for complacency. Global uncertainty, the possibility of trade disruption, tariff barriers, and adapting to a changing global environment have become critically important.
For more information, contact:
Alan Mukoki SACCI CEO 082 551 1159
Richard Downing SACCI Economist 082 822 5566