SA business mood stuck at level too low for investment

South African business sentiment dropped to a two-year low in the third quarter, reflecting elevated uncertainty as conflict in the Middle East rages on and domestic demand falters.

The quarterly business confidence index compiled by FirstRand’s Rand Merchant Bank and Stellenbosch University’s Bureau for Economic Research dropped a point to 38 in the three months through September, according to a report published Wednesday.

The reading is the weakest since the third quarter of 2024, the data show.

“Business confidence has stabilised, but at a level that remains too low to support the stronger investment and employment growth South Africa needs,” said Isaah Mhlanga, chief economist at RMB.

“A sustained improvement will require better demand conditions, continued reform progress and greater certainty in the operating environment, particularly at local government.”

Confidence slipped in four of five sub-indexes, with sentiment among new-vehicle dealers taking the biggest knock.

The index dropped 11 points