iLembe business outlook at an all-time high but serious challenges hamper growth, confidence index report finds

Despite soaring business confidence, the lack of effective law enforcement, decaying infrastructure, cutting costs of doing business and removing red tape are 4 crucial issues needing urgent intervention to ensure long-term business confidence and growth in the district.

The iLembe Business Confidence Index report – released on Monday and compiled by the iLembe Chamber in conjunction with Enterprise iLembe – said although district businesses had shown resilience in the face of countless challenges such as the Covid-19 pandemic and the July unrest, local government and its public sector partners need to urgently respond to these challenges.

The bi-annual report, which assessed the economic outlook for the second half of last year, had a confidence rating of 52.7 index points – above neutral for the first time since its inception in 2015.

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“The district economy is on a positive trajectory and remains very resilient. This also points to the positive outcomes of the iLembe economic recovery strategy,” said Enterprise iLembe CEO, Linda Mncube.

Regional business leaders and investors also showed an increased level of confidence in the iLembe district.

The North Coast hospitality industry proved to be buoyant during the recent holiday season, described as the best in years.

The tourism sector improved considerably with the return of Ballito Rage – despite it being cancelled on day 2 – and The Ballito Pro.

All sectors showed improved confidence, but only 3 were above neutral business confidence.

The health and wellness sector was most confident, tourism second and the wholesale, retail and vehicle trade sectors third.

Not all rainbows and sunshine

Overall positive sentiment in the wholesale, retail and vehicle trade sector masked poor performances in some subsectors and locations.

Rental affordability, increased competition and escalating utility costs remained areas of concern, as did the general decline of central business districts where a lack of visible policing and poor service delivery have had a negative impact.

The construction, property development and property sales sector – the largest sector in the district – also remained negative in their outlook despite improved business sentiment.

This was attributed to several disruptive factors.

Among these were delayed planning approvals, strained development of infrastructure and the expectations that developers contribute toward infrastructure development.

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Manufacturing and assembly sectors may also have shown increased business confidence, but remained negative overall.

Raw material pricing, availability of stock, loadshedding, industrial and community unrest, lack of security and decaying infrastructure in industrial nodes continue to plague the sector.

The Mandeni region, which hosts the Isithebe Industrial Estate – the manufacturing heartland of the iLembe district – remained the least confident region.

“The perennial underperformance of our local manufacturing industry needs to be tackled head-on,” said Chamber of Commerce CEO, Cobus Oelofse.

Ilembe Chamber CEO, Cobus Oelofse.

But it was acknowledged that this sector still bore the brunt of last year’s unrest, with some businesses not having reopened.

A sticky mess

Uncertainty about the performance of sugar mills contributed to the negative sentiment prevalent in the agriculture, forestry and hunting sectors.

The report highlighted that thousands of tons of sugarcane had been left unprocessed last year.

The industry was said to have had a ‘torrid’ year with the halt in production of 10 sugar mills because of the July unrest, resulting in direct losses to the industry of more than R100-million.

Arsonists also set fire to more than 500 000 tons of cane.

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The report emphasised that compared to Mandeni, Maphumulo and Ndwedwe, KwaDukuza remained the strongest business region attracting 78% of business.

“Notwithstanding the positive outlook, the levels of employment is still concerning and more efforts are required to eliminate barriers to job creation,” said Mncube.

DOWNLOAD A COPY OF THE REPORT HERE

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