Business hopes still running low North Coast confidence report finds

Key business sectors forming the backbone of the North Coast’s economy report negative business confidence.

Among the key findings of the latest iLembe Business Confidence Index report, loadshedding, rising fuel prices and the impact of the Transnet strike in October last year had negatively impacted business.

The report paints a gloomy picture for the second half of 2022 reviewed, citing that issues which contributed included road repair delays post floods, eThekwini beach closures owing to high levels of E. coli and sugar giant Tongaat Hulett entering business rescue.

Compiled in conjunction with Enterprise iLembe, the report provides a bi-annual picture of business confidence, as well as an overall business outlook.

Released last week, it indicated business sentiment had declined into negative territory.

Business sectors which had a negative outlook included manufacturing, assembly, agriculture, construction, property development and tourism, among others.

Confidence within the tourism, catering, accommodation and property management sectors remained entrenched in negative territory despite a slight improvement compared to sentiments expressed during the previous six-month period.

Among these key sectors, respondents said general trade had yet to recover to pre-Covid levels and that international tourist levels were still below those of 2019.

Some respondents noted improved figures compared to 2021, but were disappointed that revenue had been burned up by generators.

In some cases, electricity generation had doubled operational expenses.

E. coli issues at eThekwini beaches had also raised question marks over local water quality.

The fifth least confident business sector included construction, property development and property sales.

Fears centred around delayed planning approval, unwieldy building control processes, development of infrastructure, and expectations around the contributions made by developers toward infrastructure development.

In agriculture, Tongaat Hulett entering into business rescue in October last year placed high levels of uncertainty on the entire sugar value chain, from cane supply, milling operations, refining to animal feeds.

Manufacturing and assembly were the least confident sector.

Being primarily labour intensive, concerns included loadshedding, community unrest, inadequate security and decaying infrastructure in industrial areas.

Some respondents said they felt as though they ‘were waiting in vain for things to improve’, while others reported the need for urgent financial assistance from government and other market interventions such as low-interest loans to be able to survive the foreseeable future and maintain jobs.

“There is no real urgency from government to step in with drastic measures to assist small to medium businesses in navigating the crippling loadshedding and unrealistic minimum wage increases,” one respondent said.

On the backdrop of an already negative report, business expectations for the first half of 2023 remain negative as well.

The report concluded that a concerted effort was required to address the basics of refurbishing ageing infrastructure, improving law enforcement, curbing community unrest, reining in the cost of doing business and removing red tape, all elements which are essential for local business to overcome numerous structural and other modern, economic challenges.

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