Latest news with #SACCI
The Citizen
a day ago
- Business
- The Citizen
Business confidence increases, but will come under pressure from US tariff
Although business confidence is higher since the beginning of 2025 compared to the same seven months in 2024, US tariffs can change all that. Business confidence increased in July, but the 30% US tariff will put it under pressure once the fallout starts as orders dry up and local companies have to cut expenses and staff. According to the SACCI Business Confidence Index (BCI), the business climate improved over the short-term between June and July, as well as the medium-term from July 2024 to July 2025. In the short-term, 11 of the 14 sub-indices either remained unchanged or reflected a positive business climate, while over the medium-term, 10 sub-indices continued to imply an improved business climate. Over the year to July 2025, business confidence increased by 7.6 index points and by 3.5 index points between June and July 2025. The average for the BCI in the first seven months of 2025 was 118.6, 7.7 index points higher than the 110.9 for the corresponding period in 2024. The most positive short-term impact on business sentiment in July were made by an increase in new vehicles sold, increasing manufacturing output, the increasing global price of gold and platinum and lower inflation. Reduced volumes of merchandise imports, fewer overseas tourists and the decreased real value of building plans passed were signs of a weakening business climate. The medium-term (year-to-year) improved business environment was evident from increasing inward tourists, rising sales of new vehicles, lower inflation and higher world prices for precious metals. ALSO READ: Business confidence tanks in second quarter due to pessimism about trading conditions Reduced export volumes only negative from year ago Reduced volumes of merchandise exports were the only notable negative impact on the business environment from a year ago. Statistics for the automotive sector already showed a decrease in exports of about 80%. Richard Downing, economist at SACCI, says more uncertainty for South Africa could start weighing on economic activity as deadlines for additional US tariffs expire without substantial permanent agreements and progress. 'Economic growth could improve if trade negotiations lead to a more predictable framework and rational tariffs. Negotiations should support business and investor confidence, predictability and sustainability prior to other considerations. 'The imposition of a general US tariff of 30% on exports from South Africa could have unintended and austere consequences for the South African economy and for longer-term business relations. The categories of exports and the sectors affected will also play a role in how it affects economic growth and employment in the country.' ALSO READ: US tariffs: SA sends new proposal but no changes to laws US tariffs must be sorted out to grow the economy Downing says given South Africa's open economy, with 32% of output being exported, it remains obligatory that all global economic and business relationships be fostered. He points out that SACCI is concerned that the International Monetary Fund (IMF) forecasts South Africa's real economic growth at 1% for this year and 1.3% for 2026, while the South Africa Reserve Bank, at its Monetary Policy Committee (MPC) meeting at the end of July forecast growth of 0.9% for this year and for 2026. 'With such subdued economic performance, it becomes important that all efforts should be taken to enhance positive foreign trade relations, including the US, especially with the possibilities of revisiting the provisions of the Agoa Agreement. 'Although local business confidence has at least stabilised, it is important that it returns to levels achieved earlier in the year as the government of national unity took shape. 'The downside risks of potential or real higher trade tariffs to the economy, elevated uncertainty and geopolitical tensions that persist should make way by restoring confidence, predictability and sustainability of economic performance.'
Bloomberg
a day ago
- Business
- Bloomberg
South Africa Business Mood Hits Four-Month High, Tariffs a Risk
South African business confidence climbed to a four-month high, signaling a better operating climate, although uncertainty from US President Donald Trump's tariffs threatens to reverse the gains. A measure of sentiment compiled by the South African Chamber of Commerce and Industry rose to 116.7 in July from 113.2 in the previous month.
Daily Maverick
2 days ago
- Business
- Daily Maverick
Crisis for SMMEs — most of SA's small businesses in distress as economic pressures mount
SMMEs make up more than 90% of all businesses in South Africa. Yet, according to the Absa/South African Chamber of Commerce and Industry (SACCI) Small Business Growth Index, the sector is in serious trouble. More than half of small businesses in our country are in decline or in distress, the Absa/SACCI Small Business Growth Index (SBGI) has found. The index shows that 52.8% of small, medium and micro enterprises (SMMEs or SMEs) are in a state of contraction, difficulty, or risk of closure, with nearly one in 10 facing potential closure. 'You have to have a data set that enables you to create a level of high quality decision making, so that when you move into the policy space, you can move with a level of confidence,' Alan Mukoki, the SACCI CEO, said at the launch of the index. The Small Business Growth Index is a joint effort by Absa, the South African Chamber of Commerce and Industry (SACCI), and Unisa's Bureau of Market Research (BMR). Based on a survey conducted between April and May 2025, it serves as a 'real-time barometer' for policymakers, offering insights into small business conditions, challenges and growth prospects. Unmade by the market To understand the daily realities behind the index, Daily Maverick spoke to Made by Mosaic, a small enterprise employing foster parents to produce handmade leather goods. The business also ran a bakery that had to shut down in 2022, costing seven jobs. 'Made by Mosaic, just like many other small businesses, is greatly affected by rising costs, cheap knockoffs from China etcetera. Just because we have a beautiful story, serve and uplift our community and work with moms taking care of orphans, it doesn't exempt us from the effects of a very unfavourable business environment,' said manager Terry Niemack. The organisation continues to tread carefully, trying to rehire and retrain while managing limited resources. 'We are down to the bare minimum,' Niemack said. 'We are slowly starting to look at hiring more moms we can train, but it's a slow process and a fine line of balancing resources.' The weight of rising costs The Small Business Growth Index found that transport and fuel costs delivered the hardest blow, with more than 66% of SMMEs reporting increases. According to Professor Paul Kibuuka, head of the economic research division at the BMR, these cost pressures are severe and widespread across sectors. Small businesses have faced significant cost increases across all major categories, with transport and utilities seeing the steepest hikes, putting a strain on margins. More than 55% of SMMEs said they might not make another year without relief. To stay afloat, more than three-quarters plan to hike prices in the next six months. Cash flow crisis and debt dilemmas A total of 60% reported weak or critical cash flow, and only 2.8% described it as strong. Almost one in five flagged their current debt levels as 'unmanageable or very concerning'. Even more alarming: 40.5% don't use any formal finance instruments, relying instead on personal savings or informal networks. 'We found that businesses that are startups or that are in the early stages of their business, banks like ourselves really struggle to assist them and we find that in most cases we don't have the tools,' said Ronnie Mbatsane, the managing executive of SME business at Absa. More than half of small businesses surveyed can only survive another year or less if cost pressures continue without external support. Niemack echoed this, saying Made by Mosaic ticked every box for government funding but had still been unable to secure any. This speaks to a broader systemic failure. The index found that the top government intervention requested by SMMEs was easy access to affordable finance and grants, cited by 54.3%, along with reduced bureaucracy and red tape. What this means for you Fewer small businesses mean fewer local job opportunities. Rising costs for SMMEs will lead to higher prices. If small businesses close, community services like local bakeries, salons and spaza shops could disappear. Limited access to finance means fewer entrepreneurs can grow or start new businesses. A struggling SMME sector slows down overall economic growth, affecting everyone's financial outlook. A growing skills gap On the skills front, the index revealed more deficiencies. Fewer than 10% of SMMEs feel confident in their cyber security and nearly 28% face vacancies they can't fill due to a lack of skilled candidates. Worse still, 44.3% don't even know where to access skills development programmes. Formal support is barely visible. Only 14-17% of SMMEs consult local government, trade bodies, or incubators. Most rely on the advice of friends and family. When support is targeted and accessible, it makes a difference. Niemack said that help with access to trade exhibitions like SARCDA (The South African Retail, Gift, Toy, Décor, and Design Trade Exhibition) and Decorex had been invaluable to them. 'Support from the government or the private sector in the form of largely reduced rentals in malls where small businesses would have access to the public on a daily basis would help in a very big way,' she added. Geopolitics and policy shocks External shocks are also adding pressure. The US has imposed 30% tariffs on South African exports, excluding a range of mining exports. Meanwhile, China is opening its doors to African goods with zero tariffs for 53 countries. Domestically, the Reserve Bank cut rates by 25 basis points last week, but tightened the inflation target from a range of 3-6% to a hard 3%. 'The revised target makes it unlikely that we'll see any more interest rate cuts this year, meaning borrowing will remain more expensive than many households and businesses might have hoped,' said Miguel da Silva, executive of business banking at TymeBank. All eyes now turn to StatsSA's inflation data, due on Wednesday, 20 August 2025, which could guide cost and pricing decisions for businesses in the months ahead. A glimmer of hope Despite the bleak outlook, some indicators hint at cautious optimism. The S&P Global SA PMI for May climbed to 50.8 from 50.0 in April. And in a rare show of unity, the Government of National Unity passed the 2025 national Budget (after its third iteration). The Small Business Growth Index recorded that more small businesses expect to maintain their performance next year than contract. A total of 95% plan to grow sales and 77% want to expand online. 'Our small businesses are charged the same VAT as if they're big businesses,' Mbatsane said, highlighting one of the mismatches between policy design and the realities of the small business sector. DM
IOL News
09-07-2025
- Business
- IOL News
Sacci warns of stormy outlook as trade slumps amid global turmoil
The latest SACCI Trade Conditions Survey report shows that trade conditions started off relatively weak early this year, improved into positive terrain by March and April, but then weakened again in May and June. Image: Supplied TRADE conditions in South Africa have slipped back into negative territory after a brief recovery earlier this year, according to the latest SA Chamber of Commerce and Industry (Sacci) Trade Conditions Survey for May and June. The report shows that trade conditions started off relatively weak early this year, improved into positive terrain by March and April, but then weakened again in May and June. 'The trade climate gradually weakened,' Sacci noted, reporting that while 56% of respondents experienced positive conditions in March, that figure dropped to 46% by June. '51% of the respondents indicated that trade conditions in June 2025 were better than in June 2024,' the report added, offering a glimmer of hope amid the downturn. Despite the decline in sentiment, some economic indicators showed strength. Sacci pointed to new vehicle sales (+18% year on year), retail sales (+5%), inward overseas tourists (+3%), and merchandise import volumes (+3%) as evidence of certain positive developments. Notably, new vehicle sales were described as 'a leading indicator' that suggested upward momentum in the first half of the year. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ However, other key sectors told a different story. Merchandise export volumes declined by 10%, and the real value of building plans passed fell by 16% year on year. 'There is disparity amongst various trade activities,' Sacci said. Business optimism has also waned. In May, 69% of participants expected trade conditions to improve over the next six months, by June, that number had fallen to 62%. 'The disappointing economic performance at present, and a globally uncertain economic and trade environment, contributed to a less favourable trade outlook,' the report stated. Looking further ahead, Sacci warned that the trade outlook for the next six months had deteriorated. 'Expected lower sales volumes, fewer new orders, and decreasing supplier deliveries' were among the concerns raised by respondents. The downward trend in expectations was linked to uncertainty and an anticipated limited performance by the local economy. Consumer inflation remained low at 2.8% in May 2025, and producer inflation measured just 0.1%, offering some relief to households and businesses. The strengthening of the rand against the US dollar by about 1.5% in June also helped cushion fuel price increases. However, Sacci sounded a note of caution: 'Rising municipal tariffs and property tax may further distort inflationary expectations and thus disturb the prospects for lower interest rates.' It further said: 'Real interest rates remain at an uncomfortable high level.' Given South Africa's open economy, global trade relations were expected to play a critical role in shaping domestic trade conditions. 'Uncertainty of global trade prospects may become exceedingly perplexing in the near future,' Sacci cautioned. Despite the rocky outlook, Sacci found that respondents do not anticipate drastic adjustments to staffing levels — now or in the coming six months. This suggests a degree of resilience within the business community. In light of these findings, Sacci emphasised the need for ongoing efforts to boost local economic performance. 'It therefore remains inevitable that the actions taken to enhance the local economic performance must be continued and enhanced,' the report stated. As South Africa navigates a complex mix of global headwinds and domestic challenges, Sacci's message is clear: vigilance and proactive policy will be essential to steer the country toward more stable trade waters. Get the real story on the go: Follow the Sunday Independent on WhatsApp.
Reuters
11-06-2025
- Business
- Reuters
South African business confidence edges up in May after big drop in prior month
JOHANNESBURG, June 11 (Reuters) - South African business confidence edged up in May after a steep drop in the previous month, helped by a stronger rand, rallying stocks on the Johannesburg bourse and high gold and platinum prices, data showed on Wednesday. The South African Chamber of Commerce and Industry's Business Confidence Index (ZABCI=ECI), opens new tab rose to 115.8, up from 114.9 in April but lower than March's 123.5 reading. The rand gained more than 3% against the dollar in May, lifted by strong precious metals prices, hopes for a lower inflation target and signs that the budget would pass after months of coalition disagreements. The Johannesburg Stock Exchange (.JALSH), opens new tab set repeated record highs. The business chamber releases the index every two months. April's steep fall was likely caused by U.S. President Donald Trump's "Liberation Day" tariffs and the ensuing global trade war. South Africa has since made a series of trade proposals to the U.S. after a White House meeting between President Cyril Ramaphosa and Trump last month. The chamber called Ramaphosa's trip to Washington timely to nurture business and economic ties. Now that a third budget version has been accepted by major political actors, policymakers should focus on growing the economy, boosting investor confidence and creating employment, it said. "South Africa should attend to matters that scare off investors - especially foreign investors," it added.
