The South African Chamber of Commerce and Industry (Sacci) on Wednesday reported that its latest Business Confidence Index (BCI) had “lost some momentum” in April and May. The BCI had declined by 8.6 index points in April, to 114.9, but had then regained 0.9 points in May, to reach 115.8. Although lower than the BCI level earlier this year, the May figure was still eight points up, year-on-year.

Sacci classifies month-on-month periods as short-term, and year-on-year as medium-term. In the latest short-term period, the financial environment was supportive of the business climate, but on the other hand the business environment was actively hampered by subdued activity in the real economy. Over the latest medium-term period, the real economic activity and financial environment indices were evenly balanced “on having a positive effect on business confidence”.

During April and May, six of the BCI’s 14 sub-indices strengthened, two stayed neutral, and six weakened. During May, the strongest beneficial short-term influences on business sentiment were (in Sacci’s order) a stronger rand exchange rate, higher share prices on the JSE, and high gold and platinum prices (in US dollar terms). The main factors that were negative for business confidence were (again in Sacci’s order) international exposure with lower merchandise imports, fewer international tourists, a reduction in the value of approved building plans, and a decline in manufacturing output in April and May.

However, the medium-term view was more positive.

“[Year-on-year], the Sacci BCI continued to show improved confidence levels,” stated the Chamber. “In April and May 2025, the BCI was six and eight index points respectively higher than in the corresponding months a year ago. More inward tourists, increased new vehicles sold, lower inflation, and higher world prices for precious metals contributed to the more positive business climate. Weakened merchandise export volumes and the lower real value of building plans passed, weighed negatively on the business climate.”

The Sacci also pointed out that the 2025 National Budget was finally passed (after two previous failed attempts) on May 21. This contained no changes to personal tax brackets, rebates, medical tax credits or to value-added tax. It did increase the fuel levy and so-called sin taxes (on tobacco and alcohol).

It also noted that the US had softened its new tariff policy, in comparison to its original implementation. It described the visit of a South African delegation to Washington, to encourage economic, business and trade relations, as timeous.

“Sacci believes that South Africans’ wellbeing will depend on growing the economy, restoring business and investor confidence, and creating employment,” it affirmed. “It is evident that the performance of 0.8% [year-on-year] growth as recorded in the 1st quarter of 2025 is far below what is needed to address unemployment and accommodate inclusiveness. South Africa should attend to matters that scare off investors – especially foreign investors – given South Africa’s insufficient savings record.”