Confidence in agricultural sector improves in first quarter
Survey conducted by Agricultural Business Chamber and Industrial Development Corporation paints an encouraging picture of the sector
The agribusiness confidence index improved two index points to 57 in the first quarter of 2017, according to a survey conducted by Agricultural Business Chamber (Agbiz) and Industrial Development Corporation (IDC).
A reading above 50 indicates expansion while the reading below suggests contraction. The index has been in expansionary territory for at least the past three quarters, signalling an improvement in agribusiness conditions following the crippling drought.
"The [Agbiz-IDC Agribusiness Confidence index] results paint an encouraging picture of the South African agricultural sector," according to a survey, which was released on Monday.
"Following higher rainfall in the past few months, the sector is expected to show positive improvements in production this year compared to the previous one."
Among the 10 subindices making up the confidence index, the turnover, net operating income, employment, economic growth and agricultural conditions subindices were the key drivers of the improvement in confidence in the review quarter.
With the rise of "radical economic transformation", along with controversial land reform statements, confidence regarding capital investment among agribusinesses declined by 13 points from the previous quarter to 56.
Confidence in the export volumes subindex declined by nine index points from the previous quarter to 55. This is largely due to lower agricultural commodity volumes, as most crops are still at the early growing stages.