Sage Business Index 2014 reveals SMEs’ falling confidence in South African economy

The outlook of South African businesses on the state of the country’s economy is not at all optimistic, suggests this year’s Sage Business Index.

While the country has seen a recent technology startup boom, the companies’ confidence index has dropped 5.38 points which made South Africa the nation with the lowest confidence index of the 18 countries surveyed this year. Over 13 000 decision makers from SMEs were questioned.

“It is vital that Government and other stakeholders work together to arrest this decline in confidence before it gets worse,” says Ivan Epstein, co-founder of Softline and CEO of Sage AAMEA.

“Since respondents indicated that Government bureaucracy and its handling of the current economic situation are their biggest challenges, we believe there is more the government could do to build business confidence in the short to medium term.”

While confidence in the country’s management fell, confidence in the companies’ own abilities grew substantially. 65% of South African businesses expect their turnover to grow by an average of 4.9% over the next year, which saw sterling praise from Epstein.

“These results demonstrate the resilience of South Africa’s business sector, even in a year that has tested its tenacity. This year, businesses have been put to the test by labour unrest, a volatile currency, growing red-tape and regulatory pressure, and many other challenges,” he notes.

And while turnover is predicted to rise, so are headcounts in 51% of the businesses surveyed, while reliance on mobile technologies is also predicted to see a rise — with 59% believing that the infrastructure available in South Africa makes it a viable option.

“Mobile technology is bringing new levels of efficiency to South African businesses, thanks to falling data tariffs and affordable smart devices. It is making them more responsive and giving business owners more flexibility than ever before. It is a development as significant as the dawn of the PC era,” notes Epstein.

Featured image: Heather Dowd via Flickr