A shopper walks past a Foschini store at a shopping centre in Lenasia, south of Johannesburg, file. REUTERS/Siphiwe Sibeko/File Photo

Nov 23 (Reuters) – South Africa’s business confidence inched down in the fourth quarter as a rebound in building confidence was offset by the first significant falls in wholesale and retail confidence since the COVID-19 pandemic, data showed on Wednesday.

A survey by the Rand Merchant Bank (RMB) compiled by the Bureau for Economic Research showed that the business confidence index dropped one point to 38 in the fourth quarter, compared with the prior three months.

The drop was limited by regained momentum in the residential building sector thanks to seasonal factors. The survey of more than 1,000 executives showed that building confidence continued its upward trend to climb 17 points to 46.

However, wholesale confidence fell from 50 to 37 points and retail confidence dropped nine points to 42.

Surging inflation has curtailed consumer spending, while measures to counter longer load-shedding hours have raised operating costs in the retail space.

“There is no denying the fact that the economy would be doing so much better were it not for the slow pace that continues to describe the government’s efforts in addressing growth-damaging constraints such as insufficient electricity, poorly functioning ports and a failing railway network,” RMB chief economist Ettienne Le Roux said.

The survey showed that the recovery in residential building activity and increased spending on renewable energy projects and capital goods, among others, revealed higher fixed investment in some sectors.


Also, employment seemed to be expanding again in service sectors such as hotels and hospitality as an ongoing recovery in international tourism drove up demand.

(Reporting by Aby Jose Koilparambil and Amna Karimi in Bengaluru; Editing by Devika Syamnath)