South African businesses showed signs of renewed confidence in May as fears over soaring fuel costs linked to the Middle East conflict eased, although weak domestic industries and rising operating expenses continue to cloud the country’s economic outlook.
The South African Chamber of Commerce and Industry business confidence index rose slightly by 0.5 points to 124.1 in May, recovering modestly after a sharp fall of 7.7 points in April. Compared with the same period last year, confidence was 8.3 points higher.
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The improvement was largely driven by stronger new vehicle sales and higher merchandise export volumes. However, lower numbers of overseas visitors and increasing inflation continued to weigh heavily on business sentiment.
“Between March and April, 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,” Sacci said.
