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The RMB/BER Business Confidence Index (BCI) slipped by two points to 31 in the fourth quarter of 2023, meaning that less than a third of the respondents were satisfied with prevailing business conditions.
Business confidence was largely unchanged in three of the sectors, but a 15-point rise in retail confidence was outweighed by a steep 24-point drop in the confidence of new vehicle dealers, resulting in overall confidence edging down.
The business environment remained difficult in the fourth quarter, as business conditions deteriorated, against expectations.
In addition, activity ticked down somewhat despite an ease in load-shedding relative to the third quarter.
Sluggish demand means that there is likely increased pressure on turnover and profitability, with purchasing prices reaccelerating, but selling prices slowing for a fourth consecutive quarter.
This is good news for the consumer, as it may translate into lower consumer price inflation.
The main drag on the overall RMB/BER BCI came from a 24-point decline in business confidence among new vehicle dealers.
Confidence declined to just 6 index points, which is the lowest level since the second quarter of 2020 - the strictest phase of South Africa’s COVID-19 lockdown.
The sector is struggling in the face of very weak local demand with consumer income under pressure amid high borrowing costs.
