Business confidence slips as pandemic woes linger

Business confidence has slipped in the first quarter of this year, despite easing Covid-19 curbs, a survey showed on Wednesday, highlighting the fragility of the economic recovery.

The Rand Merchant Bank (RMB) business confidence index, compiled by the Bureau for Economic Research, fell to 35 points in the first quarter from 40 points in the last quarter of 2020.

The survey, which covered about 1 300 business people, added that confidence fell across sectors, with retail showing the biggest decline partly due to weaker-than-expected Black Friday and festive sales.

The next big decline was in manufacturing, which witnessed worker absenteeism, hold-ups at harbours and specific shortages of raw materials, followed by new vehicle dealers.

Last week, South Africa signed an agreement with Johnson & Johnson to secure 11 million Covid-19 vaccine doses, while easing lockdown restrictions as new cases declined.

The second phase of the country’s vaccination programme, which includes the elderly, essential workers and those with co-morbidities, is set to start around late April or early May.

“Such underlying dynamics are not reflective of a robust economic upswing. On the contrary, it talks to one that is rooted in a fragile foundation,” RMB chief economist Ettienne le Roux said.

The economy was in recession even before the pandemic struck, with strict lockdowns compounding its woes.  — Reported by Indranil Sarkar and Yadarisa Shabong, (c) 2021 Reuters