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rewrite this title S.Africa’s business confidence slips in fourth quarter – survey


Nov 21, 2023

A customer at a Pick and Pay shop in East London, South Africa, is seen comparing prices on March 17, 2023. This image was taken by REUTERS/Siphiwe Sibeko/File Photo.

The business confidence in South Africa declined in the fourth quarter, due to weak local demand for vehicles and pressure on consumer incomes from high borrowing costs. According to data from a survey by the Rand Merchant Bank (RMB) and the Bureau for Economic Research, the business confidence index fell to 31 points from 33 points in the previous quarter. New vehicle dealers, who have faced high inventory levels, reported a 24-point drop in confidence.

Businesses in Africa’s third-largest economy are struggling to pass on higher input costs to buyers due to rising borrowing costs, while consumers are also curtailing spending. Respondents in the survey highlighted logistical challenges such as delays at harbors and potholes, as well as difficulties in receiving timely payments for delivered goods. However, there was a 15-point increase in confidence among respondents in the retail sector, which has faced high operating costs due to power cuts.

While cost pressures have eased slightly, non-durable retailers reported a sharp decline in volumes due to recent price increases. According to the survey, structural supply constraints around infrastructure and electricity remain a key challenge in the South African business environment. Isaah Mhlanga, chief economist and head of research at RMB, noted that the decline in the RMB/BER Business Confidence Index also reflects underlying demand weakness.

By Editor

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