Good news about South Africa’s economy

South African business sentiment steadied in September, underpinned by high precious-metal prices and a pickup in tourism and car sales, though inflationary pressures from high oil prices remain a concern.

A gauge measuring business confidence stood at 134.3, down marginally from 135.1 in August, the South African Chamber of Commerce and Industry said in a statement on Monday.

Though the measure fell slightly on a month-on-month basis, it has gained 8.9 points since July.

“The high number of overseas tourists and expanded sales of new vehicles remained major year-on-year positive drivers of business sentiment,” the chamber said.

“The continuing high international price of precious metals remained in support of business confidence.”

Still, higher fuel prices and borrowing costs may weigh on the improved sentiment, the chamber warned.

Now in its eighth month, the Iran war has disrupted traffic through the Strait of Hormuz and driven up the cost of crude and other commodities.

Local gasoline prices climbed to a record in October, placing households and businesses under renewed strain.

The central bank raised the benchmark interest rate by 25 basis points last month to 7.25%, citing inflationary pressures stemming from the wars in Iran and Ukraine.

“This places exceptional pressure on households’ spending and business costs and viability,” Sacci said.