Page 18 - KZN Business Sense- Vol5 No4

BUSINESS CONFIDENCE IN ILEMBE INCREASING

Cobus Oelofse, CEO, iLembe Chamber of for the first half of 2019.
Commerce ■ The first half of 2018 averaged
iLembe Business Confidence Index (iBCI) 96.7 and manifest the period
– 2019 Mid-Year after the election of new
leadership for the governing
party. The SACCI BCI started
nterprise iLembe, in on an exceptionally high level of
partnership with the
EiLembe Chamber of 99.7 in January 2018, but
Commerce, Industry & Tourism, gradually declined throughout
collaborate to produce the iLembe 2018 to 95.2 in December 2018
and to measure 93.3 in June
Business Confidence Index (iBCI),
aimed at providing a biannual 2019.
picture of business confidence in ■ The decline in the SACCI BCI
the iLembe District, as well as an from January 2018 followed on
overall business outlook. the reality of structural
economic adjustments that will
The iBCI is a hybrid index be necessary to put the
derived from, firstly, a biannual economy on a higher growth
business survey conducted in the trajectory and to ensure policy
iLembe district and secondly, a certainty and consistency.
weighted index of financial and ■ Despite no further downgrades
economic activity variables. the highest ever recorded sector. cost of retail space, and the cost
survey index. ■ Manufacturing, Assembly is of amenities and level of by reputable credit rating
HIGHLIGHTS AND KEY ■ Financial & Business the fourth most confident municipal property rates agencies, 61 percent of the
FINDINGS Services, including IT & sector, having been the most exacerbated the pressure on business climate indicators of
■ Business confidence in the Communications featured confident sector a mere 18 businesses operating in this the SACCI BCI weakened
between December 2018 and
iLembe District has shown a as the most confident months ago. The period sector. June 2019.
further increase in the first economic sector. preceding the May 2019 ■ The negative confidence
half of 2019 to record ■ The Agriculture, Forestry, elections saw significant surrounding the Tourism, ■ The major challenges for
the highest level of business Hunting sector remained the disruption to business Catering, Accommodation, South Africa’s economy
confidence in the district in two second most confident sector, operations and damage to Property Management sector remain dwindling economic
years. with confidence continuing to industrial property in the wider prevailed, with this sector growth; structural public
■ The combined hybrid iBCI be negatively affected by policy Isithebe region, primarily dropping to the second least finance deficiencies; public
sector maladministration,
(i.e. both the survey and activity uncertainty around, and the related to political discord prior confident sector. institutional incapacity and
indices) for this period showed impact of, expropriation to the elections. ■ The renewed targeting of heavy corruption; high
a positive adjustment of 1.7 without compensation, the ■ Confidence amongst businesses goods vehicles and long- unemployment; and inadequate
index points, compared to the level of the sugar price and in this sector was not aided by distance truck drivers, road fixed investment by the private
second half of 2018. The index sugar imports especially. On the conclusion of the Whirlpool blockages, and the impact of sector and foreign investors.
has now gained a moderate 2.7 the positive side, opportunities sale of its South African poorly maintained roads on The debate on the land reform
points since its lowest level ever, to diversify revenue operations, and the the cost of vehicle maintenance and the possible amendment to
recorded in the second half of opportunities through announcement by at least have contributed to the the Constitution continued
2017. alternative crops and renewed one significant employer that it Transport, Warehousing, to sow uncertainty on and
■ The iBCI 2019 Mid-Year was interest in ethanol contributed is discontinuing its operations Storage sector being the least inconsistency of economic
recorded at 45.4 index points, to the upbeat sentiment of in Isithebe. confident sector, dropping from policy.
remaining entrenched in this sector. ■ Business sentiment in the the most confidence sector in
negative territory, i.e. below the ■ Construction, Property Wholesale, Retail, Vehicle the previous period. In summary
neutral level of 50 index points. Development, Property Sales Trade sector was underpinned ■ Regionally, the two smaller At national level the continued
■ The 42.1 index points, of sector recorded increased by ongoing concerns about local municipalities of poor performance by the
the survey component, is a business confidence from the the size of the local market, Maphumulo and Ndwedwe domestic economy in the first
considerable 10.3 index points previous half-year period and with the restaurant/food sectors were the most confident. quarter of first 2019 (GDP
below the first half of 2017, is now the third most confident being singled out. The high ■ The Mandeni Local decline of 3.2% Q/Q on a
Municipality was the least seasonally adjusted annual rate)
confident region in the district, are stressing inevitability of
with one respondent structural economic adjustment
What are your main business constraints? summarising the sentiment as and realignment.
“the worst market conditions in
(the) last 25 years”. The dire straits of State-Owned
Enterprise (SOE) service delivery
■ The business outlook for the
23% 20% and the financial doldrums of
Access to finance 6-month period July – public sector institutions are
December 2019 was recorded at
Market size a positive, two-year high of seriously inhibiting economic
30% 54.1, a much-needed retort to performance.
21% Competition the negative sentiments The private sector and all
expressed through the levels of government within the
Service delivery &
Survey and the Activity Index iLembe District are committed
infrastructure provision components of the iBCI. to partnering on specific
Skills shortages and other ■ The iBCI Activity Index lost .6 initiatives that will aid the
index points, from the previous viability and growth of small and
20% labour related issues period, to record a negative 48.7 medium enterprises and secure
Crime index points. investment in key economic
sectors and geographies in our
■ SACCI BCI
25% Property rates and taxes The South African Chamber of district. 
Commerce and Industry
Other T: +27 (0)87 354 6343
33% 26% Business Confidence Index
(BCI), with base-year 2015=100, E: ceo@ilembechamber.co.za
declined to an average of 93.4 W: www.ilembechamber.co.za

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