South Africa Business Confidence Lingers at 2-Year Low

The RMB/BER business confidence index in South Africa came in at 38 in Q3 2026, down slightly from 39 in the previous period and marking the lowest reading since Q3 2024. Elevated uncertainty from the ongoing Middle East conflict, coupled with faltering domestic demand, continued to undermine business sentiment in South Africa. Four of five sub-indexes declined, led by an 11-point fall in new-vehicle dealer sentiment to 38 as inventories outpaced demand, while stronger new-vehicle sales were nearly offset by weaker second-hand sales. Manufacturing confidence also fell, to 27 from 31, as weak domestic demand and softer exports weighed on activity. Capacity utilisation declined, highlighting continued spare capacity. “Business confidence has stabilized, but at a level that remains too low to support the stronger investment and employment growth South Africa needs,” said Isaah Mhlanga, chief economist at RMB.

The RMB/BER business confidence index in South Africa fell by 8 points to 39 in Q2 2026, the lowest since Q3 2025, reversing the prior two quarters of improvement and moving just below its long-term average of 40. This is the lowest level since Q3 2025, as businesses faced renewed pressure from the Middle East war. “The sharp escalation of tensions in the Middle East pushed oil prices higher, lifted local fuel costs and significantly altered interest-rate expectations. Businesses have had to adjust quickly to a less supportive outlook, which weighed on sentiment across most sectors, " noted Isaah Mhlanga, chief economist at RMB. Confidence deteriorated across the board, with four of the five sectors reporting weaker sentiment, led by new vehicle dealers (-18 points to 49) and wholesalers (-10 points to 40). Manufacturing was the only sector to record an improvement, albeit marginal (+1 point to 31), despite ongoing pressure from weak demand and higher costs.

The RMB/BER business confidence index in South Africa rose to 47 in Q1 2026, the highest since Q2 2021, from 44 in the previous quarter. The survey revealed that sentiment improved amid a stable government, supportive interest rate environment and favorable exchange rate movements, despite geopolitical concerns. "A sustained improvement in confidence will ultimately depend on stronger demand, continued policy credibility and progress on structural reforms. For now, sentiment is improving but translating that into durable growth remains the key test for 2026," said Isaah Mhlanga, chief economist at RMB.