The South African Chamber of Commerce and Industry (SACCI) in its commentary on the March Business Confidence Index (BCI) said the future is bright, strong and filled with opportunity.
SACCI noted that although the BCI eased to 131.3 in March from 134.6 in February, the first quarter 2026 average was 7.6% higher than a year ago. Surprisingly, it is also the highest in more than a decade.
Silver lining in dark clouds
SACCI noted the dark clouds caused by the Middle East conflict. It said the global economy was impaired by the effect of the war in the Middle East and subsequent economic effects. Furthermore, it commented that the effect on the South African economy has been less harsh given the price of precious metals and the relatively stronger rand exchange rate.
The silver lining in March was the impact of increased new vehicles sales, more overseas tourists, and lower inflation. These had a notable positive impact on business confidence in March 2026. That is why SACCI says the future is bright.
Tourism boost
Tourism in particular offers an opportunity amid the dark clouds caused by global uncertainty.
Business Leadership South Africa (BLSA) noted that the tourism sector hosted 10.5 million visitors in 2025. This contributed 9% of gross domestic product (GDP) provided nearly 1 million jobs. The government targeted 11 million visitors in 2026. It also aims to create an additional 1-million jobs by 2030.
BLSA said the Iran war presents an immediate opportunity. This is because Dubai and Qatar lose conference and business tourism. Consequently, South Africa is well-positioned to capture displaced demand through a shared time zone, comparable infrastructure and political stability.
Business concerns
However, SACCI said business concerns include: decreased volumes of foreign merchandise trade, restrained retail trade volumes, the higher cost of energy, subdued manufacturing output, and the lower real value of building plans passed.
SACCI believed that South Africa is in the fortunate situation that its business sentiment is to some degree hedged against unique negative events. This benefit may however create a false impression where the real economy shows signs of stagnation.
The exceptional increase in business confidence towards year-end in 2025 and up to the first quarter of 2026 is an important opportunity to convert positive business sentiment into real economic activity.
PMIs support BCI
South African businesses improved in March despite the disruptions caused by the Middle East war. This is reflected in the two Purchasing Managers’ Indices (PMI).
The S&P Global PMI rose to 50.8 in March from 50.0 in February. This was the first upturn in business conditions for six months.
Four out of the five sub-components provided a positive impact on the PMI’s direction, although one of these, suppliers’ delivery times, was due to increased constraints on shipping.
The BER manufacturing PMI rose to 49.0 in March from 47.7 in February. Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
