S.Africa’s business confidence index inches up in third quarter -survey

(Reuters) – South Africa’s business confidence edged higher in the third quarter as fewer power cuts provided respite to firms battling high-interest rates, according to a survey by a private investment bank.

The survey by the Rand Merchant Bank (RMB) and compiled by the Bureau for Economic Research showed the business confidence index climbed to 33 points in the third quarter, up from 27 points the previous quarter.

Nearly two-thirds of 1,050 senior executives surveyed said they were dissatisfied with current business conditions and the sentiment remained “still very weak.”

Power cuts, which have plagued Africa’s third-largest economy, reduced over the past weeks, compared with the first half of the year. However, production costs and stock levels were high, the survey said.

Consumer-facing sectors, such as automotive and retail, saw a rebound after a steep fall last quarter as softer prices helped profitability despite weak sales.

August also saw a taxi strike in the Western Cape province of the country that disrupted the local economy.

“Looking ahead, it will become increasingly important to also consider the impact of unrest, such as recently seen in the Western Cape, on South Africa’s economic fortunes in the run-up to the national elections next year,” said Isaah Mhlanga, chief economist and head of research at RMB.

(Reporting by Anchal Rana in Bengaluru, Editing by Tasim Zahid)