Although most North Coast businesses weathered the literal and figurative storms of 2022, all sectors suffered some damage, while the tourism sector remains heavily impacted.

This was revealed in the 2022 Mid-Year iLembe Business Confidence Index (iBCI), which, based on the findings, recommended that government urgently improves ageing infrastructure, enhances law enforcement and reduces the cost of doing business and associated red tape.

The index is a bi-annual exercise by the iLembe Chamber of Commerce and Enterprise iLembe to present a picture of the region’s business confidence.

Although the main factors in last year’s indices – namely the restrictions of Covid-19 and the July riots – have become less impactful, the April and May floods had wide-reaching influence in 2022.

At big picture level, confidence across all sectors in the combined hybrid iBCI remained steady, landing at 50.1 index points.

Also read: Ballito businesses left bruised after months of inaction on roads damaged in April floods

This is only the second time in the seven-year history of the index that a positive figure (above 50.0) is reflected after the buoyant optimism of the end-year 2021 edition.

It is an encouraging sign, as businesses continue to recover from two years of economic hardship in 2020/21.

The hybrid index is calculated by combining the survey and economic activity components, thus presenting a figure that is informed by business confidence, but also by relevant data.

Survey results this year showed a negative sentiment from businesses, resulting in an index mark of 44.6.

Economic activity remained steady, holding firm at 55.6, the fourth consecutive year that it has registered as a positive.

Pressing issues

The main concerns raised by businesses are those that emerged as a result of the flood damage.

Infrastructure damages were widespread, with repairs often a result of private sector involvement as opposed to government intervention, raising red flags among local business.

pact of these issues on freight and transport have also been exacerbated by unprecedented levels of loadshedding and localised power outages.

This has caused problems for most businesses, but the tourism sector has been hardest hit.

Another worrying sign was that four out of the five business indicators used to determine the index, were in the negative.

Inventory Levels slightly improved to 45.8, while Sales Volumes (41.7, down 13.3 points), Order Book (42.9, down 9.4) and Levels of Employment (44.2, down 0.4) all reflected negative figures.

The only positive business indicator recorded was Late Delivery of Orders, which saw an increase of 6.7 points to reach 52.5.

Individual sector performance

Four out of the seven business sectors surveyed have shown positive results.

These were Transport, Distribution, Warehousing, Storage, Freight Forwarding, Shipping and Exports (52.8, up 11.5 points), Wholesale, Retail and Vehicle Trade (54.2, up 1.0), Agriculture, Forestry and Hunting (54.5, up 9.2) and Arts, Culture and Creative Industries (62.5, up 21.0).

Agriculture buoyed to become the second most positive sector after reporting strong rainfall, crop yields and investment.

This does partially disguise the recent tripling of fertiliser costs and increase in freight costs because of road closures, but respondents were confident of a return to normalcy.

The three remaining sectors, Manufacturing and Assembly (39.7, down 2.7 points), Construction, Property Development and Property Sales (47.3, down 2.1) and Tourism, Catering, Accommodation and Property Management (40.7, down 15.2) all reflected negative marks.

Of particular concern is the tourism sector, previously the second best performing of the seven.

Although a successful Ballito Pro and KwaDukuza Winter Fair were held amid lowered Covid-19 restrictions, the industry saw widespread cancellations in the aftermath of the floods.

The next iBCI will be published in February 2023.

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