South African business confidence climbed five points in the fourth quarter after two consecutive declines, helped by broad-based improvements across five sectors, a survey showed on Wednesday.
Business confidence stood at 44 points in the quarter ending December, three points above its long-term average, according to a survey by the Rand Merchant Bank that was compiled by the Bureau for Economic Research.
The only sector to register a decline in confidence was building contractors where sentiment moved seven points lower to 39 points. Despite the decline in sentiment, activity improved, suggesting that the sector continues to recover.
Business confidence “will need steady policy progress and consistent demand to take root and grow”, RMB said in a statement that mentioned the recent uptick in sentiment is positive for the economy, but is still fragile.
The improved confidence comes despite the economy reporting mostly softer economic data this week, including slower third-quarter economic growth, a disappointing manufacturing survey and weaker-than-expected vehicle sales figures for November, alongside higher fuel prices for December.
Despite these mixed signals, the commodity-linked rand has remained resilient against the dollar, supported by investor optimism and elevated bullion prices that benefit the mining-heavy economy.
Must be sustained
“It is too early to celebrate, we need to see this tentative improvement being sustained for a couple of quarters,” , said Isaah Mhlanga, chief economist at the bank.
Read: South Africa gets its first rating upgrade in nearly 20 years
According to the survey, sustaining the improvement will hinge on manufacturing output catching up with sentiment, retail spending maintaining its momentum in 2026 and building contractors bouncing back from this quarter’s decline. — (c) 2025 Reuters
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