The improvement in business confidence at the end of 2025 was widely expected after the recent run of positive developments for South Africa
Business confidence improved as expected in the fourth quarter, although most of the respondents across the board are not happy with current business conditions.
The RMB/BER Business Confidence Index increased by five points to 44 in the fourth quarter, placing it three points above the long-term average. However, Jee-A van der Linde, senior economist at Oxford Economics Africa, says the fourth quarter survey findings indicate that only 44% of respondents are satisfied with prevailing business conditions.
“Confidence improved broadly, with only building contractors reporting weaker sentiment. The construction sector grew marginally during the third quarter, but activity remains soft.”
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Manufacturing and retail recorded largest increases
He points out that manufacturing business confidence recorded the largest quarterly improvement, although it was from a low base. This contrasts with recent factory activity indicators, as the manufacturing sector faces pressure from US tariffs.
Retail business confidence saw the second-biggest improvement, Van der Linde says, followed by wholesalers and new vehicle dealers. “This is consistent with the positive momentum observed in the trade sector, as reflected in the third-quarter national accounts data.
“According to the survey, new vehicle dealers were the only sector where most respondents reported satisfaction with prevailing business conditions.”
This graph shows that despite the fourth quarter increase, a lack of business confidence persists:
Business confidence survey conducted at time of good news in SA
Van der Linde says the increase in business confidence aligns with their expectations.
“The fourth quarter survey was conducted between 10 and 24 November 2025, coinciding with a series of sentiment-boosting developments on the economic as well as political fronts, with South Africa’s greylist exit, a well-received mid-year budget review and a subsequent credit rating upgrade by S&P.
“The survey period concluded with a 25 basis points interest rate cut and a generally successful G20 Leaders’ Summit. All the while, South African assets have been on a strong run and the inflation outlook remains benign. While demand conditions remain suboptimal, the overall domestic economic outlook is cautiously improving.”
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