(Reuters) – South African business confidence rose in the first quarter of the year, aided by vehicle trade and manufacturing as the economy recovers from the pandemic fallout, a survey showed, even as it flagged uncertainty amid the Russia-Ukraine crisis.
A survey by the Rand Merchant Bank (RMB) showed on Wednesday its business confidence index, compiled by the Bureau for Economic Research, rose to 46 points in the first quarter ended February, from 43 points in the final quarter of 2021.
Vehicle sales started to recover in January and strong performances on the Johannesburg Stock Exchange also supported investor confidence, as active vaccination campaigns helped stabilise the economy.
However, inflationary risks and higher debt-service costs linked to rising interest rates partially dampened the country’s business confidence levels in the reported quarter.
“The stagflationary shock brought about by Russia’s invasion of the Ukraine has now triggered a significant degree of uncertainty around global, and by implication, SA’s GDP growth prospects,” RMB chief economist Ettienne Le Roux said.
The survey, which involved nearly 1,300 people, showed that confidence among retailers of non-durable goods dropped due to food inflation and as higher-income earners made a shift towards dining out.
Confidence levels in the manufacturing sector inched up, helped by strong domestic sales and exports, the survey showed, adding that production continued to be disrupted due to supply chain bottlenecks.
(Reporting by Sinchita Mitra in Bengaluru; Editing by Sherry Jacob-Phillips)
