In recent news, South Africa’s business confidence has decreased in the fourth quarter of 2022 due to weak local demand for vehicles and high borrowing costs. The data shows that the business confidence index fell to 31 points in the fourth quarter, from 33 points in the previous three months. This information was part of a survey by the Rand Merchant Bank (RMB) and compiled by the Bureau for Economic Research.
According to a Reuters report on November 21, rising borrowing costs have impacted consumer spending and businesses are struggling to pass on higher input costs to buyers. Respondents on the survey also highlighted logistical challenges such as delays at harbours and potholes, as well as difficulties receiving timely payments for delivered goods.
Despite these challenges, there was a bright spot in the retail sector with a 15-point jump in confidence among respondents. While cost pressures have eased slightly, non-durable retailers reported a decline in volumes due to price increases.
Isaah Mhlanga, chief economist and head of research at RMB stated that structural supply constraints around infrastructure and electricity remain a key challenge to operating in South Africa’s business environment. However, he also noted that the decline in the RMB/BER Business Confidence Index reflects underlying demand weakness.