Page 13 - KZN Business Sense - Vol.6 No.1

ILEMBE BUSINESS CONFIDENCE INDEX (IBCI)

nterprise iLembe, in Confidence in the agriculture, as well as the degeneration of 2020 was recorded at a positive 50.4, growth, a wavering growth
partnership with the iLembe forestry, hunting sector continues especially popular beach nodes. despite being 3.6 index points down potential, structural public finance
EChamber of Commerce, to be negatively impacted on by from the two-year high recorded in impediments, public sector
Industry & Tourism, collaborate policy uncertainty around, and the The general appearance and state the previous period. maladministration, institutional
to produce the iLembe Business impact of, expropriation without of infrastructure and buildings With regards to expectations incapacity and corruption, high
were highlighted as wholly
Confidence Index (iBCI), aimed compensation, the depressed level inadequate for attracting local, per business sector, business unemployment, and inadequate
at providing a biannual picture of of the sugar price, the sugar tax, as fixed investment by the private
business confidence in the iLembe well as the level of sugar imports. but more specifically international expectations of only two sectors, sector and foreign investors. The
District, as well as an overall Farm attacks, crop theft and tourists. over the next six months, is positive, uncertainty around land reform
i.e. the financial & business services,
business outlook. The manufacturing, assembly and the possible amendment
arson were highlighted as further including IT & communications
The iBCI is a hybrid index derived concerns negatively impacting on sector (43.4;>2.1) is now the third (62.8) and agriculture, forestry, to the Constitution continued
least confident sector, having been
to cause serious ambiguity and
from, firstly, a biannual business business confidence in this sector. the most confident sector a mere 24 hunting (58.8). The remainder of inconsistency of economic policy.
survey conducted in the iLembe the sector’s outlooks are negative,
More localised aspects highlighted months ago.
district and secondly, a weighted were the need to mitigate the with the health & wellness, In summary
index of financial and economic impact of activities that influence In addition to the industrial including medical & fitness (42.1)
activity variables. unrest and community protests, sector recording the most negative At national level the continued
load shedding and load curtailment outlook. poor performance by the domestic
are weighing down the sentiment The iBCI Activity Index lost .9 economy during the latter part of
within this sector. 2019, was reflective of the numerous
index points, from the previous challenges faced by the South
Industrial property rates period, to record a negative 47.8 African economy, i.e. subdued
and decaying infrastructure, index points. economic growth, a wavering
specifically in industrial nodes, growth potential, structural public
were highlighted by established SACCI BCI finance impediments, public sector
industries. Although the 2019/20 National maladministration, institutional

A lack of support of industry, by Budget and the outcome of the incapacity and corruption, high
local authorities, was highlighted as elections in May 2019 held promises unemployment, and inadequate
a risk to conducting business in a of a better business climate and fixed investment by the private
sustainable manner. economic performance in the sector and foreign investors.
second half of 2019, the lack
The construction, property of implementation of critical The uncertainty around land
development, property sales structural reforms were lacking. reform and the possible amendment
sector (43.1 ;>.2), a key sector in The medium-term Budget, tabled in to the Constitution continued
Highlights and key findings the flow and levels of local rivers, the iLembe District’s economy, October 2019, confirmed a gloomy to cause serious ambiguity and
and the impact of the restructuring is the only sector that recorded a picture of public finances and inconsistency of economic policy.
Business confidence in the iLembe of Tongaat Hulett on trade activity decline in confidence over the last economic performance. Within the iLembe District, the
District has shown a further and scale in this sector. six-months. This sector is now the
increase in the second half of second least confident sector within The SACCI BCI started on a improved business sentiment,
despite remaining in the negative,
2019 to record the highest level of The lack of government support the iLembe District’s economy. reasonable level of 95.1 in January can be consolidated through
business confidence in the district for advancing the sugar industry’s 2019, but gradually declined productive collaboration between
in 30 months. ‘green economy’ potential was The “shocking” service levels at throughout 2019 to reach a low
once again emphasised as an the Durban Harbour, resulting level of 89.1 in August 2019, but the private and public sector,
The combined hybrid iBCI opportunity begging. in the slow clearing of containers singularly focussed on addressing
(i.e. both the survey and activity and the diversion of containers to to recover somewhat to 93.1 in persistent inherent structural issues.
indices) for this period showed a The bullishness of the wholesale, alternative ports, have resulted in December 2019 – the highest level The private sector and all
in the second half of 2019.
positive adjustment of 2.1 index retail, vehicle trade sector accurately the transport, warehousing, storage levels of government within the
points, compared to the first half reflects the trading figures reported (28.3;>2.7) sector retaining it slot as Despite no further downgrades
of 2019. The index has now gained for the 2019/20 Christmas Holiday the least confident sector. by reputable credit rating agencies, iLembe District are committed to
a steady 4.8 points since its lowest period. the latest outlook by Moody’s partnering on specific initiatives
that will aid the viability and
level recorded in the second half Despite the increase in confidence, Non-compliant operators and the turned negative. The economy, for growth of small and medium
of 2017. It is also at its highest level sentiment expressed by survey impact of poorly maintained roads the second time in 2019, registered
since the first half of 2017. participants in this sector on the cost of maintenance further a technical recession in the third enterprises and secure investment
in key economic sectors and
The iBCI 2019 Year-End was however paints a picture of a undermined confidence in this quarter of 2019. Notwithstanding geographies in our district. 
sector.
recorded at 47.5 index points, but sector significantly impacted on the subdued economic growth,
65% of the business climate sub-
despite the positive adjustment by Eskom’s load shedding, fears The most significant business indices of the SACCI BCI improved Enquiries:
remains fixed in negative territory, around the stagnant economy constraints identified by 59% of Nathi Nkomzwayo, CEO, Enterprise
i.e. below the neutral level of 50 and disruptions to trade. A lack of responding businesses, were the between June 2019 and December iLembe, nathi@enterpriseilembe.co.za
index points. law enforcement over the 2019/20 two market related indicators of 2019. Cobus Oelofse, CEO, iLembe Chamber of
peak trading period, and resulting competition and market size. 31% of The major challenges for the Commerce, ceo@ilembechamber.co.za
At 47.3 index points, the survey alcohol abuse, anti-social behaviour respondents listed skills shortages Richard Downing, Economist, Econdow,
component of the iBCI is 5.1 index and inadequate vehicle control and other labour related issues as South African economy remain econdow@axxess.co.za
www.ilembechamber.co.za
numerous: subdued economic
points higher than the first half of especially, led to disruptions in primary business constraints.
2019, but also this level below the trade and especially impacted on
first half of 2017, the highest ever businesses located in the coastal Service delivery and
recorded survey index. nodes. infrastructure provision was a
In respect of business confidence The negative confidence perceived business constraint of
28% of respondents. The lack of
per economic sector, three surrounding the tourism, catering, impactful law enforcement and
sectors recorded positive business accommodation, property control over the peak trading
confidence, i.e. above the neutral management (48.9;>8.9) sector period, decaying and tiresome
level of 50 index points. The prevailed, despite confidence within tourist nodes, coupled with the
agriculture, forestry, hunting this sector recovering by 8.9 index cost of development, cumbersome
sector (57.2;>11.8) featured as the points. and inefficient administrative and
most confident economic sector. planning approval processes, speed
The financial & business services, Respondents were unanimous of decision making and the state
including IT & communications in stressing the vulnerability of of infrastructure in established
(53.1;>7.1) was the second most the KZN North Coast’s tourism industrial precincts were
confident sector, with the wholesale, reputation, resulting from violent highlighted as specific contributors
retail, vehicle trade sector and other crime, especially during to this business constraint.
(52.7;>12.5) being the third most peak trading periods, the disregard
confident sector, also showing the for municipal by-laws and the The business outlook for the six-
biggest increase in confidence. associated anti-social behaviour, month period January 2020 – June

13