Business confidence in iLembe was at an all-time high before the onset of the electricity crisis last December.

The formation of the Government of National Unity (GNU), 300 consecutive days without loadshedding, interest rate cuts, and subdued inflation all contributed to a positive local business outlook, according to the iLembe Business Confidence Index (iBCI). The index, prepared biannually by the iLembe Chamber of Commerce and Enterprise iLembe, recorded a combined 53.4 index points at end-year, the highest figure since the iBCI began in 2015.

The combined index score is an average of the economic activity index (56.6), which measures actual business activity, and survey index (50.2), which measures business sentiment.

However, given the timing of the data collection, the high scores do not reflect the full impact of the electricity crisis on KwaDukuza’s southern grid. A more accurate reflection of the crisis’s impact is expected in the mid-year iBCI, similar to how the positive sentiment of the GNU influenced the end-year figures.

Despite the overall optimism, iLembe’s four major business sectors – agriculture, property, manufacturing and tourism – remained in the negative, although the latter three showed improvement since mid-year.

Agriculture, Forestry, and Hunting saw the most notable shift over the last six months of 2025, declining from iLembe’s second-most positive sector to its least.

According to the report, “Extended, unplanned electrical outages, Tongaat Hulett Sugar’s ongoing business rescue and resulting uncertainty around extended lease arrangements on farms, and onerous environmental regulations and budget constraints to address environmental concerns, dominated local sentiment in this sector.”

Construction, Property Development, and Property Sales improved by 3.9 points, aided by interest rate cuts. However, overall sentiment remained negative, with delayed planning and building control processes “costing developments millions.” Ongoing concerns about electrical and road infrastructure further impacted the sector.

Manufacturing and Assembly, historically one of the least confident sectors, rebounded by 9.2 points but remained in negative figures.

“Festive season trade was lower than expected and lower than 2023/2024. Trading did not improve versus a comparable period in the recent past,” said one survey respondent.
“Economic conditions are the main contributor to the low sales. People are prioritising daily necessities such as food.”

Tourism, Catering, Accommodation, Property Management, a critical sector on the North Coast, faced declining sentiment despite high tourist numbers in December.

Although tourism benefitted from challenges in Mozambique and eThekwini’s sea water quality concerns, lower-than-usual spending and the electricity crisis hurt businesses. Alternative power supply options cut into profits, as did shortened stays as a result of power concerns.

“This fiasco reflected poorly on everyone,” said one respondent.

Overall, there are some positive signs nationally that have reached iLembe, but local service delivery issues are a consistent obstacle for business growth.

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