BCI dropped in December

The BCI declined from 90.8 in November 2014 and is 3.6 points below the December reading of 2013.

"The 88.3 is the lowest level since July 2014 when the BCI measured 87.9," Sacci said on Thursday.

The chamber said the financial situation was weaker than in December 2013.

"Four of the seven physical activity sub-indices of the BCI recorded changes that were positive (month-on-month) in December compared to three in November 2014 - confirming subdued economic activity," Sacci said.

Sacci said it was concerned that the electricity shortages in the country will 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."

It said the immediate economic outlook for South Africa was largely influenced by the much lower international crude oil price and electricity power shortages.

"These two developments are contrary to each other in influencing the economy. The dismal performance by the rand exchange rate and a strong US dollar are the main causes for not taking full advantage of the lower US dollar crude oil price," SACCI said.

Given the highest level of 122.1 for the BCI in December 2006, SACCI said the present level remains a matter of grave concern.

The average for the BCI in 2014 was 90.0 compared to 91.4 in 2013. The previous lowest annual average was 87.6 in 1999. The highest BCI annual average was 118.8 in 2006, with the BCI at 100 in 2010, which serves as the base year.

"Although the subdued business confidence was broad based (five of the 13 sub-indices were positive year-on-year), the rand exchange rate made a marked negative impact," Sacci said.