Business conditions in SA improving: Economist

The RMB/BER Business Confidence Index rose by another three points to reach 38-points in the third quarter of 2024, pointing to continued improvement in business sentiment. The uptick follows an increase of five points in the second quarter of the year.

The Bureau for Economic Research notes with cautious optimism improving business conditions following the formation of the Government of National Unity (GNU).

The BER notes that the three-point increase brings the index to its best level since the fourth quarter of 2022. It further notes that while respondents are aware of persisting economic constraints, including weak demand, they are encouraged by business conditions going forward.

Independent economist, Ntombi Mbele-Thomo says, “It is showing that investors are saying that the business conditions in South Africa are becoming better, we also see that business conditions are being aided by low load shedding conditions, so the consistent energy supply is something that is definitely a move in the right direction. Furthermore, the optimism about the political environment under the under the Government of National Unity giving businesses some form of trust and optimism around there being some stability in them being able to conduct businesses around the country.”

The Index shows that confidence among manufacturers remained unchanged, while retailers and new vehicle dealers showed an improvement in confidence.

Of the five sectors making up the index, wholesalers and building contractors saw a decline in confidence.

Mbele-Thomo elaborates, “I think it would be fundamentally crucial to look at the movement of goods, we still have an issue around the ports movement especially with the increased demand that we are anticipating around the fourth quarter. We know that people might be looking at freeing up some of their pension fund with the two-pot system now being implemented, so we can anticipate that there’ll be a lot of demand and with demand there will be a lot of transportation of goods.”