Business confidence rose to its highest point in about six years during the second quarter of 2021, pointing to the continued recovery of the economy after its record contraction in 2020.
Business confidence rose to 50 in the three months to June, from 35 in the first quarter, the RMB/BER business confidence index (BCI) showed on Wednesday.
The score of 50 means that the number of respondents satisfied with prevailing business conditions now equal those who are unsatisfied — for the first time since the first quarter of 2014.
A Bloomberg survey before Wednesday’s RMB/BER BCI, which is compiled by Stellenbosch University’s Bureau for Economic Research, showed the median estimate of economists was for a reading of 37.
“At 50, the RMB/BER BCI is a far cry from its pandemic-stricken all-time low of just five points a year ago. This notable rebound, plus the fact that business confidence is now even higher than pre-Covid-19 levels is welcome news,” said RMB chief economist Ettienne le Roux.
However, the emerging signs of a third wave of Covid-19 infections, the intermittent power cuts and possible industrial action by public-sector unions could undermine confidence in the months ahead, he said.
“Notable too is the fact that the rebound in the BCI thus far has mainly been driven by consumer-sensitive sectors, while confidence in sectors linked to the supply-side of the economy remains distinctly lower.”
Confidence rebounded especially sharply in the manufacturing, retail trade and motor trade sectors. In contrast, sentiment among building contractors and the wholesale trade sector improved only marginally.
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