Johannesburg, Tuesday 02 April 2019 – Brand South Africa says that during quarter four of the 2018/2019 financial year, business confidence indicators took a distinct negative turn. This analysis stems from the Bureau for Economic Research (BER) Business Confidence Index (BCI), which gathers input from 1700 business executives in South Africa.
The BER BCI reasons that the weakening business confidence is wide-ranging, and can be attributed the following factors: Eskom and load shedding; strike action in certain sectors; revelations on State Capture from the Zondo Commission of Inquiry; as well as residual concerns regarding policy uncertainty – mainly due to the approaching National Elections in South Africa.
The BER BCI covers five economic sectors that are most sensitive to cyclical up and down turns in the economy – namely: Building/Construction; Manufacturing; Retail; Wholesale; and Automotive/New vehicle sales.
Dr Petrus de Kock, the General Manager for Research for Brand South Africa says the BER BCI points out that at a total level, strong business confidence in the SA economy was last seen in quarter 2 of the 2017/2018. “In addition to the influences mentioned above that contributed to weakening business confidence, it is apparent that fundamental economic activity indicators weakened substantially – thus contributing to weaker business confidence.
“From our analysis, the BER BCI average activity indicators for 2019 are now at a similar level to the first quarters of Q1 2017 and 2009. This is a sobering picture of weak GDP expansion, and slipping business confidence, all of which impacts on the reputation of the Nation Brand negatively,” says Dr de Kock.
However, Dr de Kock says that this outlook is expected to improve after the May 2019 general elections. “We welcome these findings as they provide us with guidance on strategic focus areas that we need to improve on. We as Brand South Africa call on all partners across all sectors to reinforce the investment drive in order to restore business confidence – not only among investors but also for our citizens. While there are internal challenges to the economy, South Africa also needs to pay close attention to weakness in the global economy, uncertainty caused by trade war dynamics, emerging economic nationalism in so-called advanced economies, and isolationist tendencies.
“Brand South Africa will share with stakeholders a much more detailed analysis and will be working with stakeholders to establish focused efforts to implement measures that address the challenges highlighted in the document,” concludes Dr de Kock.