The index slipped to 38 from 39 in the fourth quarter, maintaining a downward trajectory. As the range is 0 to 100, it remains deeply in negative territory and signals that more than six out of 10 of the over 1,000 senior executives surveyed remain “unsatisfied with prevailing business conditions”. 

“Although the BCI was little changed, the outcome hides striking dynamics among the sectors, both positive and negative,” RMB said.

Let’s start with the negative. 

Manufacturing confidence remained unchanged at 26, which is a woeful number for a sector that really should be a key driver of economic activity in terms of crucial areas such as investment, job creation and exports. It also underscores the point that Africa’s most industrialised economy is in a wrenching process of de-industrialisation, which is no surprise when road, power and water networks decay. 

The wholesale and retail sectors are also struggling and are unlikely to get much in the way of Christmas cheer this year. 

“Wholesale confidence plummeted from 50 to 37 in the fourth quarter. Besides this eye-catching drop, it is also the first time since the third quarter of 2020 that confidence fell below the neutral 50 mark. 

“Fewer orders from retailers saw sales of consumer goods take a particularly hard knock, while delays at the ports also soured the mood,” RMB said. 

And confidence among retailers fell to 42 from 51.  

“Sales across all categories worsened. The deterioration was even more pronounced when accounting for the usual uplift in activity given Black Friday and the festive season,” RMB said. 

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South African consumers are not splurging for a range of obvious reasons: many have no jobs, inflation is eroding incomes, interest rates are rapidly rising, and rolling blackouts are robbing smaller retailers – who cannot afford back-up power systems – of trading hours.  

Yet amid the carnage, there are some green shoots emerging from the shaky building sector.  

“After dropping by 17 points to 29 in the third quarter, building confidence recovered all the way back to 46 in the fourth quarter, extending what has been a volatile (but rising) trend over the past two years,” RMB said.

Even this was mixed. RMB said the residential sector was regaining traction, but the recovery in non-residential building hit a wall. 

“Interference by the construction mafia, delays in tenders awarded, fierce competition to secure work, sharply rising building costs and load shedding depressed profitability and confidence,” RMB said. 

So the usual suspects, including real-life gangsters, are still stifling the building sector, which also plays a key economic role as it is both labour and capital intensive. 

“Escalating load shedding could easily have dashed business confidence in the fourth quarter. The fact that the BCI essentially remained unchanged indicates the presence of some underlying resilience as well as countervailing forces at work. 

“The recovery in residential building activity, as well as rising capital spending on renewable energy projects, machinery, capital goods and the like reveal increased fixed investment in at least some sectors,” RMB said.

That is certainly looking at the bright side of things, and things would be brighter were it not for the lights going out on a regular basis. DM/BM