South Africa’s business confidence remained flat in the fourth quarter as concerns over recurring power cuts and intensifying supply chain issues weighed, data showed on Wednesday.
The Rand Merchant Bank (RMB) business confidence index, compiled by the Bureau for Economic Research, stayed flat at 43 points in the fourth quarter, unchanged from the prior three-month period.
Although the impact from a third Covid-19 wave and brief civil unrest in July faded, new challenges including a metalworkers’ strike and frequent power shortages kept the pressure on business sentiment, according to the survey which covered about 1 300 business people.
In October, South Africa’s biggest metalworkers union launched an indefinite strike, seeking pay rises and threatening to block supplies of parts to make new cars and accessories.
Struggling under a mountain of debt, state power utility Eskom has been regularly implementing power outages that have unnerved investors and cost Africa’s most industrialised economy billions of dollars in lost output.
Confidence levels in the manufacturing sector took a knock due to production disruptions, higher prices of raw materials, increased transport costs and additional expenses related to load-shedding, the survey showed.
“Supply chain disruptions, insufficient stocks, load-shedding and escalating cost increases will prevail for a while longer, so dimming the hopes of a further strong recovery in the RMB/BER BCI any time soon” RMB chief economist Ettienne Le Roux said.