Pessimism remains, iLembe business confidence report finds

Negative sentiments expressed by iLembe’s business sector in the latest iLembe Business Confidence Index (iBCI), has prompted recommendations calling on government to address the basics which allow businesses to thrive.

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

Issues crippling businesses which require government’s intervention, included ageing infrastructure, law and by-law enforcement, curbing community unrest and reining in the cost of doing business.

The report’s survey index component, in which regional business leaders and investors indicate their sentiment about iLembe’s economic and business performance, was also firmly entrenched in negative territory.

The economic activity index recorded a fifth successive period of positive economic activity however, meaning that the general business climate in the region is potentially better than what businesses perceive it to be.

Only two sectors – transport, warehousing and storage, and arts, culture and creative industries, reported positive business confidence while the most critical sectors recorded negative sentiment.

Confidence levels for manufacturing and assembly were at an all-time low.

iLembe Chamber of Commerce, Industry and Tourism CEO, Cobus Oelofse, said a further decline in business confidence was concerning, especially since it further embeds negative sentiment from previous periods.

Issues driving this negative sentiment included loadshedding, load-curtailment and disruptive power outages, which directly impact on production downtime, output capacity and profitability.

This sector has also been hit by cost of living increases and subdued economic growth.

“Negative sentiment prevails in all major economic sectors regionally,” Oelofse said, sharing concern especially relating to the manufacturing and assembly sectors, which heavily contribute toward the region’s GDP and employment.

Agriculture, forestry and hunting had also taken a dive, most notably the voluntary business rescue proceedings by Gledhow Sugar Mill and Tongaat Hulett setting the tone.

Other issues driving lower sentiment levels include reports of payment defaults and the escalation of fertiliser and fuel prices.

The construction, property development and property sales sectors also remain firmly in negative territory.

These sectors again indicated that delayed planning approvals, unwieldy building control processes, development of infrastructure and expectations around the contribution of developers toward infrastructure development all played a part in its negative sentiment.

Road infrastructure and resulting traffic congestion, and the increase in illegal occupation of private property and land invasion in general further caused apprehension.

While still entrenched in negative territory, the tourism, catering, accommodation and property management sector showed signs of a slight improvement.

Pessimism persisted despite the delivery of a hugely successful Ballito Pro and inaugural ZA Fest, both of which heavily contributed to occupancy levels and destination appeal of the North Coast.

eThekwini Metro’s ongoing water quality issues again raised fears that the North Coast waters might also be impacted, which while it is not the case, contributed to damaging the North Coast’s reputation.

The report further reflects on business expectations and outlook over the next six months, with expectations remaining marginally in the negative.

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