Drought impacting business confidence

The poor outlook for agriculture, caused by the drought and water crisis, has pushed business confidence into negative territory.

Enterprise Ilembe in partnership with the Ilembe Chamber of Commerce, Industry and Tourism recently released their findings of the second quarter’s Business Confidence Index (BCI), which shows that with the sugar cane crop reduced by as much as 53 percent, job losses are inevitable.

Although Ilembe’s BCI improved from the first to the second quarter, business confidence nationally was at its lowest level in 16 years.

With the tight economic situation, it is anticipated that there will be even less support for the general business climate going forward.

However, the report suggests a positive outlook on business conditions of 57.9 index points over the next six months. Sixty six percent of respondents indicating an increase in sales and 50% anticipated an increase in orders.

The construction, property development, property sales sector remains positively strong comparing the second to the first quarter while the six months outlook suggests an even more positive performance for this sector.

The index considers economic and market-related aspects that have a bearing on the business mood amongst businesses in the district.