SA businesses remain optimistic about prospects

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"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," says Ivan Epstein, co-founder of Softline and CEO of Sage Australia, Asia, Middle East and Africa.

The index shows global business confidence rising to a four-year high, with the majority of businesses around the world predicting growth in turnover and staff in the next twelve months.

South African businesses remain optimistic about their own prospects, but their confidence fell by 0.11 points to 65.69 (out of a possible 100) in the last twelve months. "It is vital that government and other stakeholders work together to arrest this decline in confidence before it gets worse," says Epstein.

Government bureaucracy

"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."

Confidence in the national economy dropped by 5.38 points to 34.54, and was the lowest of all countries surveyed this year. But confidence in the global economy is improving, perhaps one reason that South African businesses are eager to grow export business.

Businesses are optimistic about their prospects for growth over the next twelve months. Nearly two thirds (65%) anticipate their turnover will grow in the next year by an average of 4.9, while just 22% predict turnover will decrease.

There is similarly good news on the job creation front. Over half (51%) of South African businesses say their headcount will increase in the next twelve months and only 12% say they plan to reduce staffing levels. "We believe that the vibrant SME sector will lead the charge in creating new jobs which are required to stimulate the South African economy in the years to come," Epstein says.

Business attitudes to risk also appear to be changing. Half of business decision makers (50%) describe themselves as risk-takers, compared with 48% in 2013. Around 40% say that they have become more risk averse over the last seven years. "It is natural for companies to be cautious given the economic challenges South Africa faces," says Epstein. "So it's encouraging that many still have the appetite for calculated risk for the sake of growing their businesses."

Exports

Over two fifths of businesses (41%) surveyed say they do business in countries outside their own, stating that exports account for 17% of their turnover on average.

Indeed, exporters say the last year has been a good one with 40% seeing their level of exports increase and just 14% saying they have fallen. Six in ten South African exporters anticipate export turnover growth in the next year.

"The instability of our exchange rate, government bureaucracy and a lack of skills are the challenges constraining further growth of our export revenues, according to our respondents," says Epstein.

Yet many businesses do not feel they are supported in their ambitions to grow their exports. Just 7% say they receive the support they need from government, with over a third of businesses (36%) saying the one thing government should do to help them grow exports is to offer more financial incentives.