Business confidence in South Africa experienced its biggest annual increase in two years, driven by a combination of factors including higher tourism arrivals, rising precious metal prices.
According to data released on Tuesday, job security in South Africa experienced its largest annual increase in nearly two years in November, driven by a combination of factors including higher tourism arrivals, rising precious metal prices, and an increase in new vehicle sales. The South African Chamber of Commerce and Industry (SACCI) attributed this rise in optimism to both the improving economic environment and growing confidence in the new coalition government formed earlier this year.
The Business Confidence Index (BCI) rose to 118.1 in November, up from 114.2 in October and 110.2 in September. This marks the most significant annual increase since the lifting of COVID-19 restrictions in December 2022. SACCI noted that the coalition government’s broader political representation had a positive impact on business confidence, with many companies now more hopeful about the country’s economic prospects.
The increase in business confidence followed a shift in the political landscape after the African National Congress (ANC) lost its parliamentary majority in national elections earlier this year. This loss forced the ruling party to enter into a power-sharing arrangement with smaller, business-friendly parties, including the Democratic Alliance. This change has helped foster a more positive outlook on South Africa’s economic future.
Despite the rising optimism, the country’s economy has yet to show clear signs of strong recovery. South Africa’s GDP unexpectedly contracted in the third quarter, largely due to a drought that impacted agricultural production. However, analysts predict that with continued improvements in business confidence, the country is expected to return to moderate growth in the coming months.
