Business confidence plunges to all-time low as coronavirus upends economy

South Africa’s business confidence plunged to an all-time low in April, as the nationwide lockdown imposed in late March to slow the spread of the coronavirus upended the country’s economy.

The index, compiled by the SA Chamber of Commerce and Industry’s index, slumped to 77.8 in April from 89.9 in March.

“This is the lowest level ever for the SACCI BCI since its inception in 1985, and the second-sharpest month-on-month decline,” the group said in a report.

SACCI said that key drivers of the month-on-month decrease were a sharp drop in merchandise exports, the weaker exchange rate of the rand against the major trading currencies, and plummeting new vehicle sales.

“[It] remains imperative to get the economy back to work – albeit in a safe health environment,” the chamber said in a note. “A proper[ly] functioning economy will be necessary for the public sector to find the means to finance the additional expenditure emanating from the health hazard and service additional government debt.”

On Wednesday, business grouping Business for South Africa said the country’s GDP may contract by between 10% and 16.7% this year despite government stimulus efforts, placing between 1 million and 4 million formal and informal sector jobs at risk.

Business confidence plunges to all-time low as coronavirus upends economy