Business confidence in South Africa experienced its largest year-on-year increase in almost two years in November, driven by a combination of factors including higher tourism arrivals, rising precious metal prices, and an uptick in new vehicle sales, according to data released on Tuesday. The South African Chamber of Commerce and Industry (SACCI) attributed this surge in optimism to both the improving economic environment and growing confidence in the new coalition government formed earlier this year.
The Business Confidence Index (BCI) climbed to 118.1 in November, up from 114.2 in October and 110.2 in September. This marked the most significant year-on-year increase since the lifting of COVID-19 restrictions in December 2022. SACCI stated that the coalition government’s broader political representation has positively influenced business sentiment, with many firms now more hopeful about the country’s economic prospects.
The surge in business confidence follows a shift in the political landscape after the African National Congress (ANC) lost its parliamentary majority in national elections earlier this year. This loss forced the ruling party into a power-sharing arrangement with smaller, pro-business parties, including the Democratic Alliance. This change has helped foster a more positive view of South Africa’s economic future.
Despite the rising optimism, the country’s economy has yet to show strong signs of recovery. South Africa’s GDP unexpectedly contracted in the third quarter, largely due to a drought that affected agricultural production. However, analysts predict a return to modest growth in the coming months as the recovery in business confidence continues to build.