South Africa’s business confidence recovered from an all-time low in the third quarter of the year as coronavirus-led curbs were largely lifted, but consumer sentiment remained heavily depressed, a survey showed on Wednesday.
The Rand Merchant Bank (RMB) business confidence index (BCI), compiled by the Bureau for Economic Research, rose to 24 points in the third quarter from 5 points in the second quarter.
South Africa’s wholesale sector confidence rebounded the most in the period, with recoveries in agriculture and international trade adding to the overall increase, according to the survey.
Last month, President Cyril Ramaphosa announced a sweeping removal of lockdown restrictions on the economy, reopening its borders for leisure travel, lifting the bans on the sale of alcohol and tobacco products, subject to strict hygiene regulations.
“Although a lot of data are still outstanding, these developments point to a much-improved outcome where GDP can recover some lost ground, possibly increasing by an annualised rate of 20%-25% in the third quarter”, the survey said.
South Africa recorded a GDP plunge of 51.0% in its second-quarter on Tuesday, registering its largest contraction ever as a strict lockdown to curb the spread of the coronavirus shut down most activity.
“While no doubt discouraging, the improved RMB/BER BCI in the third quarter is supportive of these figures representing the worst point for this cycle,” Ettienne Le Roux, chief economist at RMB said.
The survey was conducted online between Aug.12 and Aug.31, covering about 1,800 executives across building, manufacturing and the domestic trade sectors.