SA business confidence dipped slightly in March, but remained near the highest level in more than a decade, the SA Chamber of Commerce and Industry (Sacci) reported on Wednesday.
The chamber’s business confidence index eased to 123.5 points in the month, down from 125.8 in February — the strongest level since March 2012 — but still above the March 2024 reading of 114.7.
The survey was conducted before the February budget was tabled and the subsequent disputes among members of the government of national unity (GNU) over proposed VAT increases, and before US President Donald Trump imposed sweeping tariffs on countries, including SA.
The latest index reading signals cautious optimism among business owners despite unresolved fiscal tensions and growing global trade uncertainties.
While the momentum from 2024’s political reset has not yet waned, Sacci cautioned against complacency. “Global uncertainty, the possibility of trade disruption, tariff barriers, and adapting to a changing global environment have become critically important,” it said.
The SME services provider Lula concurred that there is no room to be complacent.
“Businesses — especially small businesses — need to be given adequate support in which to thrive. Considering the tumultuous economic environment in which we find ourselves, there is no time to waste in not being focused on making businesses succeed,” said Garth Rossiter, chief risk officer at Lula.
Sacci said the improved sentiment had gained traction since mid-2024, as reflected in the various economic and financial indicators that feed into the index.
The first-quarter average of 123.1 points is well above the 113.9 recorded during the same period in 2024, showing sustained gains since the formation of the GNU after last year’s elections.
Considering the tumultuous economic environment in which we find ourselves, there is no time to waste in not being focused on making businesses succeed.
— Garth Rossiter, chief risk officer at Lula
Tourism, increased exports and lower inflation buoyed sentiment in March, while weaker imports and the rand’s depreciation against major peers dragged the index down. Declines in JSE shares and manufacturing output also dampened month-on-month optimism.
Sacci flagged the impact of the delayed 2025/26 budget as a key concern. In February, finance minister Enoch Godongwana postponed his speech amid internal disagreements over the fiscal framework. A revised budget was tabled on March 12, but has yet to be passed.
The chamber warned that prolonged indecision could “feed perceptions of political instability” and called on the government to avoid tax hikes that could further strain businesses already navigating high costs and slow growth. According to the budget, two 0.5 percentage point VAT hikes are set for May 2025 and April 2026.
“The government should explore options for cutting down on the fat and wasteful expenditure in government,” Sacci said.
“No evidence has been provided to show that enough has been done, in a systematic and scientific way, to find savings without necessarily cutting down on critical social services and infrastructure expenditure. The government should focus more on efficiencies and raising the levels of productivity.”
Adding to the uncertainty, the US administration’s more protectionist trade stance may threaten SA’s preferential trade status under the African Growth & Opportunity Act (Agoa).
Sacci noted that the geopolitical climate was shifting towards stricter scrutiny of trade and investment alignment, which could threaten open economies such as SA’s.
Despite these challenges, financial markets remained relatively calm in March, Sacci said. The rand’s performance was stable within the emerging market peer group, and inflation, at 3.2% in February, remained below the Reserve Bank’s midpoint target.
“Despite some positive changes in the macroeconomic environment in the past year, such as more reliable electricity supply, business owners striving to maintain operations are experiencing reduced cash flow,” Rossiter said.
Richard Downing, an independent economist, said sentiment was strong when the survey was conducted, but he does not expect the next reading, due in June, to reflect the same level of optimism.
“Many factors and Trump’s tariff structures have not yet taken position in the real economy,” he said.
“If you look at how the stock exchange was rattled, and how the rand started trading above certain levels — that will have an impact on confidence levels,” he said, adding that the budget disagreements and risks surrounding the survival of the GNU would also affect sentiment.
Update: April 16 2025 The article has been updated with comments.
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