SA's business confidence slumps with no hope for the future

The Rand Merchant Bank (RMB) business confidence index has dropped to 21 points in the third quarter, less than half of what it was a year ago and well below the 50-mark ( any number below 50 shows contractions).

Respondents in the survey have said they are unsatisfied with business conditions in South Africa.

Bruce Whitfield spoke to Chief Economist at RMB Ettienne le Roux for reaction. He says this is 'awful' news.

There is not a single sector that has got an index level above 30.

Ettienne le Roux, Chief Economist - RMB

Most of the respondents are telling us that business conditions are worse than a decade ago. You actually have to go back to 1998 and 1999...just for perspective, remember in a short space of times the currency weakened, very harsh conditions. Respondents tell us that they see similar conditions playing out today.

Ettienne le Roux, Chief Economist - RMB

le Roux suggests that more and more respondents are quite pessimistic about the future compared to a year ago.

A year ago, many of our respondents told us that conditions are tough but the future will look better. Interestingly enough more respondents are telling us that the future is actually not going to improve. In other words more and more business people are telling us we are actually giving up hope.

Ettienne le Roux, Chief Economist - RMB

Government must encourage and convince the private sector that the future is actually worth investing in.

Ettienne le Roux, Chief Economist - RMB

Click on the link below to hear the full conversation...

Meanwhile Old Mutual Investment Group economist Johann Els says this is no surprise and that this news is not only significant to South Africa with the heightened recession risk globally - not only in the US but China, as well as the trade war.

He is however optimistic.

We are all very depressed but in my mind when we are all on the same page regarding how depressed we are, that creates opportunities.

Johann Els, Economist - Old Mutual Investment Group

I strongly believe even though the pace of reform has surprised us on the downside recently, a lot has been done over the past 20 months or so and gradually all those little things will get some traction. I believe that the next few years will be better than the past few years.

Johann Els, Economist - Old Mutual Investment Group

Click on the link below to hear more from Els...

Enjoy The Money Show, but miss it sometimes?

Get the best bits emailed to you daily, right after it ends:

Subscribe to our Business Wrap Newsletter


Recommended

by NEWSROOM AI
Read More
Why Africa is uniquely poised for an electronic payment revolution

Why Africa is uniquely poised for an electronic payment revolution

Companies that can design simple user interfaces – and create large networks – will dominate this emergent industry.

Need a loan to grow your small business? There’s a pot of money waiting

Need a loan to grow your small business? There’s a pot of money waiting

Spartan SME Finance provides finance for small businesses. Bruce Whitfield interviews its CEO, Kumaran Padayachee.

Business confidence gets a slight boost ahead of elections

Business confidence gets a slight boost ahead of elections

Sacci report shows improvement by 1.9 index points to 93.7 compared to 91.8 in March.

Encouraging rise in Absa PMI as blackout fears ease

Encouraging rise in Absa PMI as blackout fears ease

Standard Bank's Goolam Ballim says the election outcome will determine business confidence and growth for the second half of the year.

How to best save and invest for your children

How to best save and invest for your children

Personal finance advisor Warren Ingram has advice for parents wanting to ensure an excellent education for their kids.

'SA Inc. is starting to lose faith in President Cyril Ramaphosa'

'SA Inc. is starting to lose faith in President Cyril Ramaphosa'

Ramaphosa has promised a tsunami of investment yet, as a percentage of GDP, it’s at a 13-year low, says Ferial Haffajee.

Popular articles
'Duke and Duchess of Sussex visit highlights goodness of South Africa'

'Duke and Duchess of Sussex visit highlights goodness of South Africa'

Professor Pitika Ntuli weighs in on Prince Harry and Meghan Markle's tour of the country.

Audi Q8 'marries elegance and practicality', but it comes at a price

Audi Q8 'marries elegance and practicality', but it comes at a price

'Large and in-charge' - Motoring journalist Naresh Maharaj rates Audi's new luxury SUV offering.

4 things you should never say if you want to get rich

4 things you should never say if you want to get rich

Don’t ever say or, worse, believe any of these wealth-destroying platitudes, implores personal finance expert Warren Ingram.

Fraudsters are getting professional, scamming consumers with ingenious methods

Fraudsters are getting professional, scamming consumers with ingenious methods

“It makes all of us a target to fraudsters,” warns Manie van Schalkwyk of the South African Fraud Prevention Service.

'We have evidence that the EFF and Julius Malema took bribes for tenders'

'We have evidence that the EFF and Julius Malema took bribes for tenders'

Arabile Gumede interviews Stefaans Brummer, a journalist at the amaBhungane Centre for Investigative Journalism.

46 women rescued in Joburg sex trafficking raid

46 women rescued in Joburg sex trafficking raid

An expert on human trafficking explains how the syndicate operates and how women are lured into dens.