The South African Chamber of Commerce and Industry’s (Sacci’s) latest Business Confidence Index (BCI) has dropped to its lowest level this year, marking the lowest level since the mid-1980s.

However, the chamber believed that South Africa had the perseverance to recover.

The August BCI decreased by 5.7 index points from 95.3 in July to 89.6, representing the largest month-on-month decrease since November 2015. It was also 3.3 index points lower year-on-year.

“On a month-on-month basis, four subindices of the BCI made positive contributions to the index between July and August. Five subindices had a negative impact and four had a neutral month-on-month effect on the business climate,” Sacci said in a statement on Wednesday.

The survey showed that the sharp monthly drop in August had been caused predominantly by lower merchandise import and export volumes, while lower consumer inflation and new-vehicle sales made only moderate positive monthly contributions.

Year-on-year, the 3.3 point decrease in August, was the net result of six of the 13 subindices that deteriorated year-on-year.

“Considerable lower merchandise import volumes and default higher real financing costs were largely responsible for the negative year-on-year effect on the BCI,” Sacci said in its statement.

Five subindices were positive and two remained unchanged from the prior year, with lower consumer inflation, improved new-vehicle sales and the stronger weighted rand exchange rate preventing a larger year-on-year deterioration in the business index.

“Sacci is concerned that, given the positive sentiment and outlook prevailing in the global context, South Africa’s economic performance could be doing better and is suboptimal at a time when the country could be better positioned to fully use this opportunity and enhance economic growth and foreign investment. Additionally, various domestic public finance difficulties have emerged,” the chamber noted.

Despite this, Sacci believed the country could persevere, face the challenges and seek out opportunities to invest in the economy and, subsequently, generate the positive confidence required to revitalise growth.

“The positive developments with inflation, interest rates and the balance on the trade account of the balance of payments could serve as inspiration for other challenging areas in the economy and reinvigorate business confidence,” Sacci concluded.