South African businesses show a high degree of confidence in their ability to succeed in the face of a tough economic climate.
This is according to a new HSBC survey of over 8,500 companies in 34 markets.
The survey was conducted between August and September and reflects sentiment among South African business some six months into the presidency of Cyril Ramaphosa.
Despite the domestic economic backdrop, the HSBC Navigator survey reveals that nine out of 10 respondents in South Africa believe the near-term outlook for international trade is positive – higher than the 78% global average.
A similar share of respondents (91%) feel confident their company will succeed in the current trade environment.
Expectations of global economic growth and confidence in buyer/supplier relationships were most frequently cited as key factors supporting this optimism.
The top three markets targeted for expansion by South African businesses responding to the survey are Botswana, the United States and Mozambique.
Relatively few respondents identified the US-China trade dispute as having an adverse influence on their outlook. Instead, concerns were more frequently centred around the exchange rate and the deterioration in domestic economic conditions.
The clear majority (70%) of South African businesses believe global protectionism is on the rise, although they do not cite this as a major concern for their company’s prospects for foreign trade.
About two thirds (65%) of South African businesses think that relevant industry/sector related free trade agreements (FTAs) will be helpful in the next three years.
The Navigator survey also shows that, globally, more than half of companies (51%) expect that free trade agreements, where they apply to their country and industry, will benefit them over the next three years.
FTAs are particularly popular in emerging markets, with 60% of firms in these countries saying they will have a positive impact, compared to 45% of firms in developed markets.
“South African businesses are staying positive in the face of some of the most challenging economic conditions seen here for some years, said Mark Stadler, CEO of HSBC South Africa.
“The ability to remain focused in volatile circumstances has long been a characteristic of local business leaders and underpins their optimism compared to counterparts in other countries.
“It is also encouraging to note that South African businesses are prioritising digitalisation and data analytics as drivers of growth and efficiency.”