JOHANNESBURG, March 13 (Xinhua) -- South African Business Confidence Index (BCI), released on Wednesday, showed the BCI declined by three points to 28 in the first quarter of 2019, the lowest level in almost two years.
Rand Merchant Bank (RMB) and Stellenbosch University's Bureau for Economic Research surveyed 1,700 business people between February 13 and March 4 about their feelings on the business environment.
The RMB said the latest reading of 28 means that more than seven out of ten business people were unsatisfied with current conditions. According to the survey, building, retail, wholesale, manufacturing declined while new vehicle trade improved.
Local and international factors contributed to the decline in business confidence, said RMB.
"Several other external developments have suppressed the business mood," Joandra Griesel, RMB spokesperson said.
"Among these were the disruptive effects of load shedding in February, prolonged labor strikes in certain sectors of the economy, slowing growth in South Africa's main trading partners which includes the EU, China and the rest of Africa."
She stated that revelations about the extent of state capture and corruption, conflicting pronouncements on policies and priorities due to the contestation within the ruling party African National Congress also impacted negatively to the business confidence.
Griesel added that the expropriation of land without compensation have created some perceptions on some investors. The demands of the upcoming elections also contributed to the low confidence in business.
RMB observed that it is encouraging that since taking over Presidency, Ramaphosa have exposed past corruption and announced measures to fix them. They also noted that all these efforts like the rebuilding institutions and last year's investment and job summits will bear fruits in future.
RMB chief economist Ettienne le Roux said South Africa will not be able to shift to a lasting higher growth and prosperity path without more short-term pain. "This time around, the country cannot rely on the global economy to counter-balance such internal adjustment costs, as global growth itself is now shifting to a lower gear."