Q2 BUSINESS CONFIDENCE INDEX DROPS UNDERSTANDING THE TRENDS

BY LERATO PHOSISI

The business confidence index has taken a hit in the second quarter of 2025, with a notable decline in several sectors. According to recent reports, South Africa’s RMB/BER business confidence index fell to 40 in Q2 2025, down from 45 in the previous period. This downturn is attributed to global trade uncertainties and domestic logistical challenges.

Wholesale and commission trade: This sector experienced the largest drop in business confidence, plummeting from 3.2 to 12.2. Export-oriented companies in this sector, however, remain optimistic about sales abroad, with a net score of plus 18%.

While business services: confidence in this sector turned negative, dropping from 3.2 to 4.1. Despite this, companies in business services are positive about sales abroad, with a net score of plus 8.7%. However agriculture , forestry and fishing seems to improved in this sector, but it remains one of the most negative, with a score of 11.3.

Export-oriented companies in this sector are also positive about sales abroad, with a net score of plus 5.6%.
Therefore information and communication saw a rise in business confidence, with a score of 1.2. companies in this sector are also optimistic about sales abroad, with a net score of 11.9%.

Labour shortages: 34% of entrepreneurs cited labour shortages as the main obstacle to business operations, although this number has been declining.
Weak demand leads to 19% of entrepreneurs reported weak demand as a major obstacle. Financial constraints: 10% of entrepreneurs cited financial constraints as a significant challenge, with this number slowly increasing in recent quarters.

Despite the decline in business confidence, export-oriented companies remain positive about sales abroad. The manufacturing sector, which has the largest share of Dutch exports , saw an improvement in sales abroad, with a net score of plus 5.1%. As the global economy continues to navigate uncertainties, businesses will need to adapt to changing conditions to stay ahead.