South Africa’s business confidence saw a notable rebound in the final quarter of 2025, reversing two consecutive declines as the economy showed signs of renewed momentum. The RMB/BER business confidence index climbed five points to 44, three points above its long-term average, indicating that nearly half of surveyed companies are satisfied with current business conditions. The recovery coincides with a modest GDP growth of 0.5% quarter-on-quarter, highlighting a stabilizing economic environment.
Analysts attribute the uptick to a combination of domestic and international developments. Positive drivers included South Africa’s removal from the Financial Action Task Force greylist, a credit rating upgrade by S&P Global, a well-received medium-term budget, and a stable rand supported by favourable interest rates. Together, these factors helped improve sentiment across industries that are sensitive to financing conditions, giving businesses more confidence in the near-term outlook.
The manufacturing sector led the recovery, with confidence surging 16 points to 39—the highest level since 2022. While production volumes have yet to fully align with sentiment, fixed investment indicators showed modest gains, suggesting potential for longer-term growth. Retailers also bounced back after a weak third quarter, climbing 11 points to 43, while wholesalers saw a four-point increase to 42. New-vehicle dealers remained the most optimistic, with confidence reaching 58 following a late-quarter policy rate cut.
Despite the overall improvement, building contractors were the only sector to register a decline, slipping seven points to 39. However, underlying activity continued to improve, indicating that the sector’s recovery remains intact. RMB chief economist Isaah Mhlanga cautioned that while the rebound is meaningful, it should not yet be interpreted as a definitive turning point. Sustained improvement over multiple quarters is still necessary for long-term confidence to solidify.
Looking ahead, structural reforms remain critical to translating rising demand into higher production, investment, and job creation. Observers are watching closely to see whether manufacturing output catches up with optimism, retail spending maintains momentum, and the building sector recovers fully. With easing inflation pressures and ongoing policy support, South Africa’s economy may be poised for steadier growth in 2026.
source: Business day