After dropping from 50 to 43 points in the third quarter, the Business Confidence Index (BCI), compiled by Rand Merchant Bank and Bureau for Economic Research (BER), has remained unchanged in the fourth quarter of this year.
The BER points out that there are a variety of factors that affected sentiment in the quarter.
The fourth quarter survey took place between 27 October and 15 November and covered at least 1 300 senior executives in the building, manufacturing, retail as well as wholesale and motor trade sectors.
“The third wave of Covid-19 infections, the unrest in KwaZulu-Natal and Gauteng, transport delays, shortages of inputs, and insufficient stocks all hit confidence hard in the third quarter. Although the impact of some of these shocks has faded, new ones like the Numsa strike and load-shedding emerged, which prevented sentiment from recovering in the fourth quarter,” the report read.
Building confidence jumped from 18 to a still-low 30 points in the fourth quarter.
Ettienne le Roux, chief economist at RMB said : “Retail confidence declined marginally from 56 to 52 and wholesale confidence from 55 to 53. These are the only two sectors where confidence has exceeded the neutral 50-mark and where indices are significantly above long-term averages. Black Friday and festive season sales could well amplify this trend if stock levels improve.
“Thanks to a slight improvement in the composite activity indicator also derived from the survey results, confidence could easily have increased in the fourth quarter.
“It is a pity that various unfavourable external as well as domestic shocks prevented this from happening. Unfortunate too is the likelihood that supply chain disruptions, insufficient stocks, and escalating cost increases will prevail for a while longer, so dimming the hopes of a further strong recovery any time soon.”