On March 17, a customer was seen comparing prices while shopping at a Pick and Pay shop in East London, South Africa. According to a report by Reuters on November 21, South Africa’s business confidence fell in the fourth quarter due to weak local demand for vehicles and high borrowing costs. The business confidence index dropped to 31 points from 33 points in the previous three months.
Respondents on the survey pointed to logistical challenges such as delays at harbours and dealing with potholes as well as struggles to receive timely payments for delivered goods. Despite this, there was a 15-point jump in confidence among respondents in the retail sector, which has been struggling with high operating costs due to power cuts. However, non-durable retailers reported a steep decline in volumes due to price increases of late.
According to Isaah Mhlanga, chief economist and head of research at RMB, structural supply constraints around infrastructure and electricity remain a key challenge to operating in the South African business environment. He also noted that the decline in the RMB/BER Business Confidence Index reflects underlying demand weakness.