The South African Chamber of Commerce and Industry (Sacci) has expressed “grave concern” over December’s Business Confidence Index (BCI), which shed 2.5 index points to decline from 90.8 in November to 88.3.

This was 3.6 points below that of December 2013 and the lowest level since July 2014, when the BCI measured 87.9.

“Given [that] the highest BCI level recorded was 122.1 in December 2006, the present level remains a matter of grave concern,” the chamber said in a statement on Thursday.

The average BCI for 2014 was 90 compared with 91.4 in 2013.

The previous lowest yearly average was 87.6, which was recorded in 1999, while the highest BCI yearly average was 118.8 for 2006.

Sacci noted, however, that, while the subdued business confidence was “broad-based”, the rand exchange rate made a marked negative impact.

“The financial situation [in December last year] was weaker than that of December 2013. Four of the seven physical activity subindices of the BCI recorded changes that were positive in December compared with three in November – confirming subdued economic activity,” it noted.

Looking ahead, Sacci believed the immediate economic outlook for South Africa would be largely influenced by lower international crude oil price and electricity power shortages.

It expressed further concern that electricity shortages would cause the economy to stagnate at low levels of activity.

“An apathetic approach to economic challenges has led to the constrained environment South Africa finds itself in. [The] BCI reflects a perspective on the situation,” it concluded.