South Africa’s business confidence waned in the first quarter as problems with the pandemic persist
A face mask shopper waits for her turn to pay for her groceries as coronavirus disease (COVID-19) spreads at the Mall of the South in Johannesburg, South Africa on June 17, 2020. REUTERS / Siphiwe Sibeko
(Reuters) – South Africa’s business confidence weakened in the first quarter of this year after recovering in 2020 despite the easing of COVID-19 restrictions. That was the result of a poll on Wednesday that highlighted the fragility of the economic recovery process.
The Rand Merchant Bank (RMB) business confidence index compiled by the Bureau for Economic Research fell from 40 points in the final quarter of 2020 to 35 points in the first quarter.
The survey, which was attended by around 1,300 business people, found that confidence across sectors has declined, with retail seeing the biggest drop, partly due to weaker-than-expected Black Friday and celebratory sales.
The next big drop was in manufacturing, where there were employee absenteeism, delays in ports and specific raw material shortages, followed by new car dealerships.
Last week, South Africa signed an agreement with Johnson & Johnson to secure 11 million COVID-19 vaccine doses and relax lockdown restrictions as new cases fell.
The second phase of the country’s vaccination program, which involves the elderly, key workers, and people with comorbidities, is slated to begin in late April or early May.
“These underlying dynamics do not reflect a robust economic upturn. On the contrary, it speaks to someone who is rooted in a fragile foundation, ”said RMB chief economist Ettienne Le Roux.
Africa’s most industrialized economy was already in recession before the pandemic broke, and severe lockdowns exacerbated its problems.
Reporting by Indranil Sarkar and Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich