A report by REUTERS on November 21, 2023 revealed that South Africa’s business confidence fell in the fourth quarter due to weak local demand for vehicles and high borrowing costs. The business confidence index dropped from 33 points in the previous three months to 31 points in the fourth quarter. The decline was mainly due to consumer incomes remaining under pressure, which made it difficult for businesses to pass on higher input costs to buyers. Logistical challenges, such as delays at the harbours and potholes, also contributed to the decline in confidence among respondents. Despite this, there was a bright spot for retailers who experienced a 15-point jump in confidence. Non-durable retailers reported a steep decline in volumes due to price increases, while durable retailers saw only a slight decrease in volumes. According to Isaah Mhlanga, chief economist and head of research at RMB, structural supply constraints around infrastructure and electricity remain a key challenge for operating in South Africa’s business environment. However, the decline in the RMB/BER Business Confidence Index also reflects underlying demand weakness.