28 November 2019 – 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, FirstRand’s Rand Merchant Bank unit and Stellenbosch University’s Bureau for Economic Research said in a statement 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 Africa’s most industrialized economy dodged a recession in the second quarter, some forecasts suggest it may have contracted again in the three months through September. The statistics office will publish gross domestic product data for that period on December 3.
“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.” Source (Bloomberg)