The South African Chamber of Commerce and Industry (Sacci) business confidence index (BCI) rose 1.1 points to 91.9 in December, from 90.8 in November.
The better monthly reading is the highest reading in the second half of 2013‚ but is still 1.1 index points below the December 2012 level.
Sacci economist Richard Downing said on Thursday that although business confidence was up on its November 2013 performance‚ the economic outlook for 2014 remained varied, from cautiously optimistic to concerns about a risk-prone environment.
“The business climate and economic performance depends on the country’s approach to certainty in its economic policy direction and institutional capacity to implement policy‚” Mr Downing said.
Other issues that needed to be considered included supporting the private sector as the vanguard of economic growth and sticking to economic recipes that had proven and sustainable outcomes.
“We also need to position ourselves to take advantage of improvements in the expected global economic performance for this year,” Mr Downing said.
The average level for the BCI in 2013 was 91.4 compared with an average of 94.1 in 2012.
Last year presented the worst annual performance for the BCI since 1999, when it averaged 87.6 and when the business cycle was in a downward phase.
The average for the 2013 BCI was 8.1 index points below the 2010 base-year level of 100 and 27.6 index points below the annual peak of 119 in 2006.
Four subindices of the BCI did not move significantly between December and November 2013, five were negative while four positively influenced the BCI in December.
On a year-on-year basis, four subindices made positive contributions to the BCI, eight had a negative effect and one was neutral.
Major activities such as exports and manufacturing improved on a year-on-year basis, while municipal services and lower real financing costs also contributed, albeit to a lesser extent.