South African business confidence edged up to 124.1 in May, recovering slightly from a seven-month low in April, as firms adjusted to geopolitical crude oil price shocks.
Data released Thursday by the South African Chamber of Commerce and Industry (SACCI) showed a modest 0.5-point month-on-month gain, clawing back some ground after a sharp 7.7-point plummet from March to April.
Buoyant domestic new vehicle sales and robust merchandise export volumes served as the primary drivers behind the positive turnaround, overriding steep declines in overseas tourist numbers and mounting local inflationary pressures.
External pressures linked to the Middle East conflict had initially spiked energy costs, but SACCI noted that negative corporate sentiment subsided in May as a steady rand exchange rate softened the global oil shock.
The marginal rebound arrived amid a tightening domestic fiscal climate. The South African Reserve Bank recently implemented a 0.25 percentage point repo rate increase to anchor inflation, a move SACCI cautioned adds short-term pressure.
Despite current financial volatility and a tougher private-sector operational climate, the May index remains resilient over the longer term, tracking a significant 8.3 index points higher than the levels recorded in May last year.
