The SA Chamber of Commerce and Industry said its Business Confidence Index pulled by back by 1.7 index points in March to 93.8, from 95.5 in February.
Sacci said Wednesday that this was the first month since November 2016 that the SACCI BCI declined year-on-year after it improved year-on-year for three consecutive months in December 2016 and in January and February this year.
Sacci economist, Richard Downing, said the Business Confidence Index is nearly four index points lower than the high of 97.7 in January 2017.
"The latest events dented the renewed positive motion of the BCI after the uncertain business climate in 2016. The developments since the 24th of March up to the release of the Standard and Poor's downgrading, at this stage mainly impacting on the exchange rate and capital markets, would have knocked 0.6 index points off the SACCI BCI to read 93.2," Downing said.
"If the rand continues on these exchange rate levels, the SACCI BCI could therefore shed another 0.6 index points in April 2017. Taking into account that no further repercussions will follow on the reshuffling of the cabinet and South Africa's credit rating will not deteriorate further," he added.
Downing said that the year-on-year changes in the sub-indices show that the business climate deteriorated from February 2017 to March 2017; however, the 1st quarter 2017 BCI was still 2.6 index points better than the 1st quarter of 2016. "The stronger rand exchange rate made the largest positive year-on-year contribution to the BCI followed by lower inflation. Substantially less merchandise import volumes, higher real financing cost and lower share prices than a year ago made the largest negative year-on-year contributions to the business climate," Downing said.
"All indications are that economic growth will depend on whether fiscal consolidation will prevail while prudent public sector governance continues. It is important that there is adherence to the advice of the credit rating agencies to keep attending to serious structural economic deficiencies".
