Gloomy business outlook for the North Coast

One of the North Coast’s most popular business offerings – tourism, accommodation and property management – showed disappointing economic growth figures and a major drop in business confidence for the second half of this year.

This is according to the biannual business confidence index report compiled by Enterprise Ilembe, in partnership with the Ilembe Chamber of Commerce, Industry and Tourism. The mid-year survey which is aimed at indicating the current and expected state of a region’s economy shows the lowest level of business confidence in Ilembe since the start of the survey in 2015.

Measured using a base point of 50 points to rate the various business sectors, the success of businesses is determined where above 50 is positive and below is negative.

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Tourism, catering, accommodation and property management went from being the most successful sector in the first half of last year to the third most successful sector this year. The first spot was taken by agriculture, forestry and hunting (43.7 index points) followed by construction, property development and property sales (41.5).

Blamed for the 21.4 index drop in the tourism sector, the survey suggests that the beaches are not up to scratch and that municipal by-laws associated with anti-social behaviour are not being enforced.

“Further concerns relate to “overtrading” in certain tourism subsectors, the persisting seasonal nature of tourism, skills availability, and the pressure on leisure spending due to the increase in VAT and escalating fuel prices.”

The manufacturing, assembly sector also tumbled from the most confident sector in the previous period, to only the 4th most confident sector. This deterioration resulted from the ongoing spates of industrial unrest, community protests and interference with business operations in the region’s main industrial areas.

Ilembe Chamber of Commerce CEO Cobus Oelofse said the level of business confidence in Ilembe is hugely disappointing.

“It is an uncomfortable reminder that the Ilembe district is not isolated from, not only national economic sentiment, but also international sentiment especially around emerging economies,” said Oelofse.

“Despite this disappointment, Ilembe and the KZN North Coast remain the premium investment destination in South Africa, and are much better placed than any other area in the country to ride the current storm of dejection.”

He said the social partnership efforts at national and provincial level need to be replicated at district and local municipal level to ensure that the investment potential of our region is realised.

“The iBCI, for one, provides important points of departure for the Chamber to engage on. Furthermore, the commitment and support from public sector leaders, especially to address disruption to business operations and uncertainty around policy, is reassuring to create the investment climate that we are pursuing.”

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