Business confidence rises from two-decade low - TechCentral

Business confidence rises from two-decade low

South African business confidence improved in the fourth quarter for the first time in almost two years, yet the economy remains stuck in a downward phase.

A quarterly gauge measuring sentiment rose to 26 from a two-decade low of 21, Rand Merchant Bank and Stellenbosch University’s Bureau for Economic Research said in a statement on Wednesday. This is based on the responses of 1 800 business executives surveyed during the first three weeks of November.

Despite the increase, confidence remains deeply negative, with the majority of respondents still expressing a sense of pessimism, RMB said. The index is far below the three-year high of 44 it reached when Cyril Ramaphosa became president in the first quarter of last year.

While South Africa dodged a recession in the second quarter, some forecasts suggest it may have contracted again in the three months to September. The statistics office will publish GDP data for that period on 3 December.

“At current levels, business confidence remains consistent with an economy bumbling along in near recession-like conditions,” RMB said. “For us to convincingly conclude that the long and persistent downturn in the RMB/BER business confidence index has bottomed out will take not one, but several quarters of improvement in sentiment driven by a consistent recovery in underlying activity.”  — Reported by Rene Vollgraaff, (c) 2019 Bloomberg LP

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