A recent survey conducted by Rand Merchant Bank (RMB) and the Bureau for Economic Research has revealed a significant uptick in South African business confidence during the third quarter.
The index climbed to 38 points, marking a substantial improvement from the previous quarter’s 35 points.
Several factors contributed to this positive shift.
The formation of a coalition government following the May elections and the subsequent stability in electricity supply have instilled optimism among businesses.
Isaah Mhlanga, chief economist at RMB, highlighted the anticipated interest rate cut as another catalyst for domestic demand growth.
The African National Congress’ loss of its parliamentary majority and the subsequent coalition with the Democratic Alliance have created a more favorable business environment.
Eskom’s successful efforts in maintaining consistent power supply have also alleviated concerns about economic disruptions.
While businesses continue to grapple with weak demand, the survey indicates a promising outlook for the coming quarter.
Retail confidence has shown a notable improvement, driven by increased sales volumes.