{"id":836723,"date":"2025-09-03T11:43:55","date_gmt":"2025-09-03T09:43:55","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=836723"},"modified":"2025-09-03T11:50:58","modified_gmt":"2025-09-03T09:50:58","slug":"bad-turn-for-south-africa-gets-worse","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/836723\/bad-turn-for-south-africa-gets-worse\/","title":{"rendered":"Bad turn for South Africa gets worse"},"content":{"rendered":"\n

The RMB\/BER Business Confidence Index (BCI) continued to decline in the third quarter of the year after turning from a three-year peak at the start of the year.<\/p>\n\n\n\n

Although only marginal, the index still slipped further by one point to 39 following a five-point decline in the second quarter of 2025. <\/p>\n\n\n\n

This is three points below the long-term average level of 42, and implies that just over 60% of respondents are dissatisfied with prevailing business conditions. <\/p>\n\n\n\n

According to the Bureau for Economic Research (BER), the underlying results point to an economy that is muddling through, with many activity and demand indicators in line with 20-year average levels. <\/p>\n\n\n\n

“The current level of confidence is insufficient to drive an acceleration of much-needed investment to
improve South Africa\u2019s potential economic and employment growth rates,” it said.<\/p>\n\n\n\n

Isaah Mhlanga, Chief Economist at RMB, noted that the South African business confidence experience in recent quarters is not out of line with what has been seen in many other economies.<\/p>\n\n\n\n

This is a result of the many political and economic changes that have hit the globe in the last 12 months, including South Africa.<\/p>\n\n\n\n

Global market conditions are currently normalising into a new and “difficult global world order,” he said.<\/p>\n\n\n\n

For the third quarter of the year specifically, the BCI survey took place from 6 to 25 August 2025, which coincided with the start of the 30% tariffs on many of South Africa\u2019s exports to the US.<\/p>\n\n\n\n

US President Donald Trump put the tariffs into effect on 7 August after a more than three-month pause, with South African businesses struck by the realisation that the government could not secure a better trade deal with the US.<\/p>\n\n\n\n

However, the BER noted that, while survey respondents mentioned the tariffs, it remains difficult to disentangle the impact on production and trade.<\/p>\n\n\n\n

“Front-loading, cancellations and production holidays in the automotive sector, for example, also affected activity over the period,” it said.<\/p>\n\n\n\n

Overall, though, it is safe to postulate that it was negative for sentiment. <\/p>\n\n\n\n

More positively, local political developments were less eventful during the survey period than in the second quarter. <\/p>\n\n\n\n

The first and second quarters of the year were hit with heightened political infighting over the 2025 Budget, which, at one stage, put markets on edge, readying for a collapse of the Government of National Unity.<\/p>\n\n\n\n

This never materialised, and the budget was ultimately passed. While political tensions linger, nothing substantial has happened to put stability at risk.<\/p>\n\n\n\n

Another positive was the South African Reserve Bank (SARB) cutting its policy interest rate by a further 25bps at the end of July, which would have been a boon to the more interest rate-sensitive sectors of the economy.<\/p>\n\n\n\n

In addition, the SARB also announced their preference for a 3% inflation target from the existing 4.5% midpoint, which would allow for more interest rate cuts when inflation expectations fall closer to 3%.<\/p>\n\n\n\n

Meanwhile, consumer inflation ticked up in July, following a sub-3% streak in the first half of the year, but remained below the 4.5% expectation for the year.<\/p>\n\n\n\n

Disparate views<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

When looking at overall confidence, businesses in South Africa are more negative. <\/p>\n\n\n\n

The flat reading of the index gives the impression that little changed quarter-to-quarter, but the reality is that there were vastly different feelings in each sector.<\/p>\n\n\n\n

The BER noted that confidence in each sector moved by 10 points or more. In most sectors, the change was bigger than the long-term standard deviation, which is unusual.<\/p>\n\n\n\n

Two sectors \u2013 building contractors and new vehicle dealers – saw their confidence improve from weaker second-quarter readings, while manufacturing, retail, and wholesale dealers reported declines in confidence.<\/p>\n\n\n\n

The only sector to be in net positive (above 50) territory was the new vehicle sector, where dealers swung 12 points into positive feelings.<\/p>\n\n\n\n

“This was the second time this year that confidence was above 50, and in both cases, the jump in confidence was preceded by an interest rate cut,” the BER said.<\/p>\n\n\n\n

On the flip side, after leading the pack in the second quarter, wholesalers\u2019 confidence declined to 38 points (from 50 before).<\/p>\n\n\n\n

The sector dipped below its long-term average of 45 points and reversed a five-quarter streak of outperformance. Consumer goods struggled with sales volumes, the BER said.<\/p>\n\n\n\n

Generally, respondents reported struggling in the third quarter amid rising electricity costs, an onerous administrative burden and competition from imports.<\/p>\n\n\n\n

While corruption, red tape, sluggish logistics, and other structural issues in the South African economy continue to feature, many comments also highlighted the failure of service delivery at a municipal level.<\/p>\n\n\n\n

“We will likely see increased focus on this as we head to the local government elections next year,” the BER said.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Business confidence in South Africa continued to decline in the third quarter, after turning from a three-year high at the start of the year.<\/p>\n","protected":false},"author":10,"featured_media":814856,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[8333,14829,2214],"class_list":["post-836723","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-bci","tag-ber","tag-rmb"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=836723"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836723\/revisions"}],"predecessor-version":[{"id":836726,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836723\/revisions\/836726"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/814856"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=836723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=836723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=836723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}