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...
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