Business Confidence Remains Strong
Written by Eszter Rapanos
The March 2025 Business Confidence Index (BCI), released by the South African Chamber of Commerce and Industry (SACCI), shows that business sentiment remains strong and steady despite a slight decline from earlier highs.
The index confirms that South Africa’s business community continues to hold positive expectations, even as global uncertainties and local economic pressures persist.
📊 Confidence Levels Hold Firm in Q1 2025
The BCI averaged 123.1 for the first quarter of 2025, compared to 113.9 in 2024, marking a notable improvement of 9.2 index points year-on-year.
While there was a slight drop of 2.3 points in March compared to the record 125.8 in February, this is a minor correction in an otherwise strong quarter. Confidence has climbed steadily since the pre-election low of 107.8 in May 2024 — a sign that businesses are regaining trust in the post-election economic direction.
🔍 What’s Driving Confidence?
Positive influences in Q1 2025 included:
Increased tourism and foreign visitor numbers
Higher new vehicle sales, signalling stronger consumer demand
Lower inflation, which eased cost pressures.
Stable private sector credit and precious metal prices
These factors reflect stronger consumer demand and improved business sentiment across sectors like tourism, automotive, and retail.
⚠️ Concerns That May Affect the Outlook
Despite the overall upbeat tone, several economic pressures reduced the BCI from February’s high:
Weaker rand against major currencies
Falling JSE share prices
Declining manufacturing output
Lower merchandise exports and fewer imports
High real interest rates (6.9%), discouraging borrowing and investment
These highlight ongoing vulnerabilities in the external trade and production environment, as well as the impact of policy uncertainty and currency volatility.
💰 Fiscal Instability Remains a Threat
The report warns that the postponement of the February 2025 national budget created political and financial uncertainty. Even with revised proposals tabled in March, Parliament had not yet passed a fiscal framework by month-end.
SACCI’s concerns include:
Excessive government borrowing to fund recurrent expenditure
Lack of a clear plan to reduce wasteful spending
Potential future tax increases that may damage business confidence
For accountants, this means preparing clients for possible tax and regulatory changes while tracking government responses to rising debt and expenditure challenges.
🌍 Global Headwinds: A Warning Sign
SACCI flagged concerns about the new U.S. administration’s aggressive trade posture. South Africa’s alignment with global trade norms is now more crucial than ever to:
Maintain access to platforms like AGOA
Secure foreign investment
Avoid being seen as "non-aligned" in shifting geopolitical dynamics
With economic growth at just 0.6% in 2024 and a forecast of 1%–1.5% for 2025, South Africa cannot afford to lose access to international market.
🧾 What It Means for Us
The sustained business confidence presents opportunities — and responsibilities — for financial professionals:
Increased business activity: Higher confidence means more deals, investments, and strategic planning — all areas where accountants play a critical role in tax planning, structuring, and reporting.
Sector-specific growth: Accountants working with automotive, travel, and retail clients should prepare for rising demand in financial reporting, payroll, and compliance.
Global policy impact: Evolving international trade and tax dynamics require careful attention to cross-border tax planning, transfer pricing, and double taxation relief.
Investor trust and due diligence: As investor interest increases, accountants are vital in ensuring financial transparency, performing risk assessments, and ensuring compliance with tax and financial standards.
📌 In Summary
The March 2025 BCI confirms a stable and growing confidence in South Africa’s economy — and accountants will be at the centre of turning that sentiment into sustainable business strategy.
With shifting global conditions and domestic fiscal uncertainty, now is the time for accountants to help clients prepare, adapt, and grow.
📥 Visit www.sacci.org.za to download the full BCI report.
