CEO business confidence at its lowest - more African opportunities sought

Half of South African CEOs are looking to expand their operations into Africa in search of growth opportunities, according to the latest Merchantec CEO confidence Index released yesterday.

Of this 50%, 44% are expanding close to home in other southern African countries while 26% are looking to West Africa and an additional 26% are looking to East Africa. Northern Africa was the least attractive region for CEOs’ expansion strategies. About 6% of South African CEOs already have operations running across the continent.

CEOs who are exploring expansion strategies in Africa commented on the presence of Chinese-owned companies operating throughout the continent and the difficulty in beating the lower prices set by these Chinese competitors.

The remaining 50% of CEOs, who are not actively pursuing African expansion strategies, are either unable to do so due to their companies currently being in what they call "survival mode" or they are looking to expand offshore.

The index showed that CEO confidence in South Africa had hit an all-time low, recording a decrease of 7% from a score of 45.4 points in the second quarter of 2015 to 42.2 points in the third quarter of 2015, persisting at a score below the neutral score line of 50 points. This is the lowest score recorded in the index since its inception in the second quarter of 2009.

The decrease in the overall confidence of CEOs in South Africa is demonstrated by a drop in confidence in all the sectors, namely basic resources, industrials, financial, consumer goods, consumer services and information and communication technology.

CEO confidence relating to the current economic conditions, compared to six months ago, dropped by 5% to 30.6 points, with the largest decrease demonstrated by CEOs in the consumer services sector.

Source: http://www.fin24.com/Economy/CEO-confidence-hits-all-time-low-20150902