Business confidence falls in fourth quarter
New vehicle dealers were the most pessimistic, with their component of the index sinking to 15 points in the fourth quarter from 22 in the third
The South African business community is gloomier in the quarter under way than it was in the previous one, according to a poll sponsored by RMB and done by Stellenbosch University's Bureau of Economic Research.
The RMB/BER quarterly business confidence index fell to 31 points during the fourth quarter of 2018 from 34 points in the third quarter.
Seven out of every 10 respondents remained unhappy with prevailing business conditions, while confidence continued to track below the neutral 50 mark in all the sectors.
The survey was completed shortly before the Reserve Bank raised its repo rate 25 basis points to 6.75% and cabinet reshuffle which both occurred on November 22.
New vehicle dealers were the most pessimistic of the five sectors covered. Business confidence among new vehicle dealers plunged to 15 points in the fourth quarter from 22 in the third.
"If it wasn’t for the unusually large drop in new vehicle dealer confidence, the RMB/BER business confidence index would have risen for the first time in almost a year," the report said.
Three of the five sectors the survey covers showed rises.
Retailers registered the biggest improvement with their business confidence rebounding to 33 points from 23 points. If the survey had been done after "Black Friday" on November 23, the lift in optimism may have been higher, the report noted.
Building contractor confidence fell to 32 points from 44 points.
“While President Ramaphosa’s refreshing new focus on public-private-sector partnerships is welcome, the reality is, a multitude of political and policy issues — chief among which is the uncertainty around the government’s land reform plans — continue to weigh down on confidence,” RMB chief economist Ettienne Le Roux said in a media statement.
"Unless these are resolved in a more speedily and concrete fashion, private-sector fixed investment, and by implication, economic growth, will remain disappointingly low. Time is running out as global headwinds are mounting and domestically inflation as well as policy interest rates have bottomed.”