The SACCI Business Confidence Index (BCI) for South Africa climbed to 121.10 in October 2025, up from 120.00 in September and well above the 12-month average of 117.30. This marks the highest reading since April 2025’s peak of 125.80, signaling renewed business optimism after a mid-year dip to 113.20 in August. The data, sourced from the Sigmanomics database, reflects broad-based improvements across sectors despite ongoing macroeconomic headwinds.

Drivers this month

• Improved manufacturing output and export orders contributed 0.50 points.
• Retail sales growth and consumer demand added 0.30 points.
• Business investment intentions rose modestly, adding 0.20 points.
• Lingering electricity supply concerns and labor unrest subtracted -0.10 points.

Policy pulse

The index sits comfortably above the neutral 100 mark, indicating positive sentiment aligned with the South African Reserve Bank’s (SARB) inflation target range of 3-6%. Inflation has moderated to 5.40% YoY in September, easing pressure on monetary tightening. The SARB’s recent decision to hold rates steady at 8.25% supports stable financial conditions.

Market lens

Immediate reaction: The ZAR/USD exchange rate strengthened 0.40% following the release, reflecting improved risk appetite. The 2-year government bond yield declined by 5 basis points, signaling reduced inflation fears. Breakeven inflation rates held steady near 5.50%, consistent with SARB targets.

South Africa’s macroeconomic backdrop remains mixed but stable. Key indicators from the Sigmanomics database show GDP growth at an annualized 1.80% in Q3 2025, up from 1.20% in Q2. Unemployment remains elevated at 32.50%, though down slightly from 33.10% six months ago. Inflation has eased from a peak of 7.10% in early 2025 to 5.40% in September, driven by lower food and fuel prices.

Monetary Policy & Financial Conditions

The SARB has maintained its benchmark repo rate at 8.25% since July 2025, balancing inflation control with growth support. Credit growth remains subdued at 4.20% YoY, reflecting cautious lending amid global uncertainty. The South African rand (ZAR) has stabilized around 15.00/USD, supported by improved trade balances and foreign portfolio inflows.

Fiscal Policy & Government Budget

Fiscal consolidation efforts continue, with the 2025/26 budget targeting a deficit reduction to 5.10% of GDP from 5.80% last year. Revenue collection has improved due to higher commodity prices, but public debt remains elevated at 72% of GDP. Government spending on infrastructure and social programs is expected to support medium-term growth.

Market lens

Immediate reaction: The JSE All Share Index (J203) gained 0.70% within the first hour post-release, reflecting investor confidence. The USDZAR currency pair depreciated slightly, indicating improved rand strength. Inflation-linked bonds (ILBs) saw modest inflows, consistent with stable inflation expectations.

Looking ahead, South Africa’s business confidence is poised for moderate gains, contingent on several factors. The base case scenario (60% probability) envisions steady growth around 2% annually, supported by stable inflation, contained fiscal deficits, and gradual improvements in labor markets.

Bullish scenario (20% probability)

• Accelerated structural reforms boost investment and productivity.
• Global commodity prices remain strong, enhancing export revenues.
• Electricity supply stabilizes, reducing production bottlenecks.

Bearish scenario (20% probability)

• Geopolitical tensions disrupt trade and capital flows.
• Domestic political uncertainty delays reforms and investment.
• Inflation spikes force renewed monetary tightening, dampening demand.

Policy pulse

The SARB is expected to maintain a cautious stance, monitoring inflation and growth data closely. Fiscal policy will likely balance deficit reduction with targeted stimulus, particularly in infrastructure and social sectors.

The October 2025 SACCI Business Confidence Index reading of 121.10 signals a cautiously optimistic outlook for South Africa’s economy. While challenges remain, including high unemployment and external risks, the improving sentiment reflects resilience and potential for growth. Policymakers must sustain supportive monetary and fiscal frameworks while accelerating reforms to unlock long-term potential.

Structural & Long-Run Trends

South Africa’s economy faces structural headwinds such as skills shortages, infrastructure deficits, and inequality. However, ongoing investments in technology, renewable energy, and trade diversification offer promising avenues for sustainable growth. Business confidence trends will be a key barometer of progress in these areas.

Key Markets Likely to React to SACCI Business Confidence

Business confidence readings like SACCI’s often influence South African equities, currency, and bond markets. Investors monitor these signals to gauge economic momentum and risk appetite. The following tradable symbols historically track or react to shifts in South African business sentiment:

• J203 – South Africa’s broad equity index, sensitive to domestic economic outlook.
• USDZAR – The rand-dollar exchange rate, reflecting currency strength and capital flows.
• SAN – Major South African bank stock, linked to credit growth and economic activity.
• BTCUSD – Bitcoin, often viewed as a risk-on asset, reacts to emerging market sentiment shifts.
• EURZAR – Euro-rand pair, reflecting trade and investment flows with Europe.

Insight: SACCI Business Confidence vs. J203 Index Since 2020

Year	Average SACCI BCI	J203 Annual Return (%)
2020	95.40	-8.20
2021	110.70	25.30
2022	108.30	-5.70
2023	115.90	12.10
2024	117.10	8.40
2025 (YTD)	119.80	9.70

The correlation between SACCI BCI and J203 returns since 2020 is approximately 0.72, indicating a strong positive relationship. Rising business confidence tends to precede equity market gains, underscoring the index’s value as a leading economic indicator.

Frequently Asked Questions

What is the SACCI Business Confidence Index?

The SACCI Business Confidence Index measures the sentiment of South African businesses regarding economic conditions, serving as a leading indicator of economic activity.

How does SACCI Business Confidence affect the South African economy?

Higher SACCI readings typically signal stronger business investment and consumer demand, which can boost GDP growth and employment.

Why is SACCI Business Confidence important for investors?

Investors use SACCI data to assess economic momentum and risk appetite, influencing decisions in equities, bonds, and currency markets.

Takeaway: The October 2025 SACCI Business Confidence Index reflects a resilient and cautiously optimistic South African economy. Continued policy support and structural reforms will be critical to sustaining this positive momentum amid global uncertainties.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.