Page 21 - Business Sense

ILEMBE BUSINESS CONFIDENCE INDEX (IBCI)

2018 YEAR-END

nterprise iLembe, in The survey component of the
partnership with the iBCI, which was conducted in the
EiLembe Chamber of latter half of January 2019 and
Commerce, Industry & Tourism, which records subjective business 50.0
collaborate to produce the sentiment, showed a positive 49.0
iLembe Business Confidence adjustment of 2.8 index points on 48.0
Index (iBCI), aimed at providing the all-time low recorded in the 47.0
a biannual picture of business previous six-month period. 46.0
confidence in the iLembe ■ The 38.1 index points is still 45.0
District, as well as an overall a considerable 14.3 index points 44.0
business outlook. below the highest recorded 43.0
survey component in the first 42.0
The iBCI is a hybrid index
derived from, firstly, a biannual half of 2017. 41.0
business survey conducted in the ■ Transport, warehousing, 40.0
iLembe district and secondly, a storage featured as the most 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 2016 2017 2017 2018 2018
weighted index of financial and confident economic sector. Mid-Year Year-End Mid-Year Year-End Mid-Year Year-End
economic activity variables. ■ Agriculture, forestry, hunting
remains the second most
Highlights and key findings confident sector, with tourism, ■ The manufacturing, assembly and facilities such as ablutions, ■ The World Economic Forum’s
■ Business confidence in the catering, accommodation, sector’s woes continue, with and a disregard for municipal (WEF) meeting in Davos, from
iLembe District has shown a property management the ongoing spates of industrial by-laws and the associated anti- 22 to 25 January 2019, paid
slight increase from the record remaining third in the ranking. unrest, community protests social behaviour. specific attention to the future
low levels recorded in the ■ Despite a slight increase in and interference with business of economic progress. 2019
previous two half year periods. confidence, the manufacturing, in the region’s main industrial Further concerns expressed is regarded as “… the year of
■ The combined hybrid iBCI assembly sector slipped to the areas, being exacerbated relates to the growth in Airbnb confusion...” due to the
establishments and the inability
over the past six-months by re-
(i.e. both the survey and activity sixth most confident sector, introduced Eskom load of registered establishments to uncertain outcome of Brexit,
indices) for the second half of having been the most confident shedding, and defaulting compete on a cost basis with such European economic turmoil,
2018 showed a positive sector 12 months ago. debtors. establishments, as well as a need the USA trade difficulties with
adjustment of .9 index points, ■ The decline in confidence to promote the KZN North Coast notably China, and a slowing
compared to the first half of in the construction, property Feedback to validate this to international tourists. world economy.
2018. development, property sales sector’s performance includes ■ The continued poor
sector, a key sector in the a reluctance to invest in larger ■ The Mandeni Local performance by the domestic
The iBCI 2018 Year-End was iLembe District’s economy, saw manufacturing equipment Municipality was the district’s economy in 2018 (annual GDP
recorded at 43.7 index points, this sector tumble from the because of the unreliability and most confident region. growth of 0.8%) and an
despite the positive adjustment second most confident sector, in cost of electricity, the increasing Although the index points anticipated 1.3% for 2019, are
it remains entrenched in the previous six-month period, and unrealistic enterprise remain in negative territory, stressing the desperate need for
negative territory, i.e. below the to one of the least confident development expectations from this local municipal area, policy certainty and appropriate
neutral level of 50 index points. sectors. communities surrounding home to the Isithebe Industrial sustainable economic policy.
industrial precincts, the costs of Estate, showed a significant
logistics from secluded industrial recovery from the record low In summary
areas, and the crumbling in the previous period. SACCI’s BCI confirms that
infrastructure, in especially the Business confidence in the the major challenges for South
Isithebe Industrial Park, and Ndwedwe Local Municipality Africa’s economy still remain
the lack of response from the retracted by 23% to embed slow economic growth, structural
authorities in this regard. itself in the negative, despite public finance deficiencies,
being the second most public sector maladministration,
The negativity of sentiment in
the key sector of construction, confident area in the district. institutional capacity and
property development, ■ The business outlook for the corruption, unemployment and
property sales remained being six-month period January to inadequate fixed investment by
substantiated by delayed planning June 2019 was recorded the private sector and foreign
approvals, unwieldly building at its lowest level, since investors alike.
control processes and apathy commencement of the iBCI, The debate on land reform
towards the time sensitivity at 40.5, a further .9 index and the possible amendment
of property development. In points down from the to the Constitution has added
addition, the development previous low of 41.4 index an additional uncertainty to
of infrastructure, increasing points recorded for the first economic policy.
concern about the capacity of half of 2018.
the road infrastructure and ■ The iBCI Activity Index was The continued poor performance
resulting traffic congestion, recorded at a negative 49.3 by the domestic economy in 2018
work disruptions, stoppages and index points, the third highest (annual GDP growth of 0.8%) and
extortion by “business forums” Activity Index level recorded. an anticipated 1.3% for 2019, are
and land occupations contributed stressing the desperate need for
to what one respondent described SACCI BCI policy certainty and appropriate
as a “difficult property market”. ■ The SA Chamber of Commerce sustainable economic policy.
The negative sentiment and Industry’s (SACCI) Business The private sector and all
in the tourism, catering, Confidence Index (BCI) was levels of government within the
accommodation, property recorded at 94.3 for the second iLembe District are committed to
management sector relates to half of 2018, 0.6 index points partnering on specific initiatives
perceptions expressed that the higher than the second half of that will aid the viability and
KZN North Coast is “unsafe” 2017. The second half 2018 growth of small and medium
and “unstable”, ongoing concerns business confidence index enterprises and secure investment
about the management of public slipped by 2.4 index points in key economic sectors and
spaces, especially beach nodes compared to the first half of 2018. geographies in our district. n

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