On March 17, 2023, a customer was spotted comparing prices while shopping at a Pick and Pay store in East London, South Africa. The image was captured by REUTERS/Siphiwe Sibeko/File Photo.

In November 2023, a Reuters report revealed that South Africa’s business confidence had slipped in the fourth quarter due to weak local demand for vehicles and high borrowing costs. The business confidence index fell from 33 points in the previous three months to 31 points in the fourth quarter, according to a survey by Rand Merchant Bank (RMB) and compiled by the Bureau for Economic Research. This information was particularly concerning as consumer incomes remained under pressure due to high borrowing costs.

The decline in confidence among new vehicle dealers marked the lowest level since the second quarter of 2020 when South Africa imposed its strictest COVID-19 lockdown. Respondents on the survey also highlighted logistical challenges, including delays at harbors and potholes, which made it difficult for businesses to receive timely payments for delivered goods.

However, there was a glimmer of hope as retailers reported a 15-point jump in confidence. This increase could be attributed to slightly easing cost pressures and non-durable retailers experiencing an uptick in volumes despite price increases. Despite this improvement, respondents still cited structural supply constraints around infrastructure and electricity as significant challenges to operating in South Africa’s business environment.