SA business con­fi­dence plunges – Grant Thorn­ton

The Star Early Edition - - BUSINESS REPORT - Wise­man Khuzwayo

SOUTH Africa’s prob­lems, big and small have tal­lied up to un­der­mine business op­ti­mism, which plum­meted to a pal­try 3 per­cent in Septem­ber quar­ter on quar­ter from 35 per­cent, ac­cord­ing to tracker re­search re­leased by Grant Thorn­ton South Africa yes­ter­day.

The con­sul­tancy firm’s in­ter­na­tional business re­port says a lack of vis­i­ble eco­nomic re­forms, cur­rent is­sues re­lat­ing to land grabs, the “Nkand­la­gate”, and con­tin­ued rab­bler­ous­ing in Par­lia­ment are not help­ing mat­ters, and business ex­ec­u­tives’ op­ti­mism plum­meted to 3 per­cent from 35 per­cent as of June 30.

“As long as we have th­ese is­sues, the econ­omy will not grow beyond 2 per­cent. They need to be ad­dressed as a mat­ter of ur­gency,” Deepak Na­gar, the na­tional chair­man of Grant Thorn­ton, said.

The data is from a survey of business ex­ec­u­tives about the com­ing 12 months as of Septem­ber 30.

The in­ter­na­tional business re­port pro­vides in­sight into the views and ex­pec­ta­tions of over 13 000 busi­nesses a year across 45 economies.

The survey of South African business ex­ec­u­tives also high­lights that a bar­rage of fac­tors are con­strain­ing business growth, with 51 per­cent of busi­nesses lament­ing ris­ing en­ergy costs. Those frus­trated by ex­change rate fluc­tu­a­tions were 47 per­cent, while 37 per­cent strug­gled with a lack of a skilled work­force, 36 per­cent ex­pressed con­cern re­gard­ing eco­nomic un­cer­tainty and 35 per­cent stated over-reg­u­la­tion and red tape as re­strict­ing business ex­pan­sion.

Na­gar said the five-month strike in the plat­inum sec­tor, the one-month strike in the met­als sec­tor and the in­dus­trial ac­tion at the SA Post Of­fice con­tin­ued to im­pact neg­a­tively on eco­nomic per­for­mance.

“It’s not all a lost cause. We need to get back on track. Growth is the driver of the econ­omy. Oth­er­wise our African coun­ter­parts will over­take us as an in­vest­ment des­ti­na­tion of for­eign di­rect in­vest­ment,” he said.

How­ever, Na­gar said South Africa was not the only one con­fronting business op­ti­mism is­sues. The re­search’s global fig­ures show the eco­nomic bal­ance in the euro zone is un­der­go­ing sig­nif­i­cant change as Ger­man business con­fi­dence took a sharp nose­dive in the last quar­ter, threat­en­ing to drag the bloc down­wards.

Global fig­ures re­veal in the last three months op­ti­mism across the euro zone fell from a net 35 per­cent to just 5 per­cent.

Business op­ti­mism in Ger­many plum­meted from 79 per­cent to just 36 per­cent.

Na­gar said this fol­lowed a con­trac­tion in the Ger­man econ­omy in the sec­ond quar­ter, amid fears over the af­fects of the geopo­lit­i­cal Ukraine cri­sis on trade and en­ergy sup­ply.

He said a con­tin­ued slide in op­ti­mism in France, the EU’s sec­ond-big­gest econ­omy, was also con­tribut­ing to the euro zone’s malaise.

When South African business own­ers were asked if in the last 12 months they, their staff or fam­ily of staff had been af­fected by the threat of per­sonal se­cu­rity such as house break­ing, vi­o­lent crime, road rage, the re­sults were very disturbing, with a mas­sive 65 per­cent say­ing yes.

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