South Africa’s business confidence slipped in the third quarter as sentiment among building contractors deteriorated due to shortages of some materials, load-shedding and planning delays, a survey showed on Wednesday.
A survey by the Rand Merchant Bank (RMB) and compiled by the Bureau for Economic Research showed the business confidence index (BCI) slipped to 39 points in the third quarter, from 42 points in the previous three months.
“While on the face of it this is a disappointing outcome, the underlying picture is not as bad as the lower BCI implies,” according to the survey of about 1 200 senior executives at companies across the country.
South African business confidence has been stuck in the low 40s since mid-2021 due a string of shocks ranging from labour strikes to war and floods.
It is unlikely the fall in the BCI points to another outright contraction in real GDP, the survey said, as confidence among retailers and wholesalers remains above the long-term averages and signals solid consumer spending.
“None of this is to say the economy will experience strong growth in the year ahead; external headwinds are mounting, interest rates will continue to rise while the danger of summer power outages is ever present,” said Ettienne le Roux, chief economist at RMB.