The level of confidence among South African CEOs remained subdued in the third quarter of the year amid challenging domestic and international conditions, Merchantec Capital reported on Thursday.

The Merchantec CEO Confidence Index increased by 1.5% to an overall score of 53.2 points during the quarter, with increases in the basic metals and technology sectors being offset by decreases in the industrial and consumer goods sectors.

Merchantec stated that high levels of corruption impacted negatively on investor confidence and foreign-direct investment and that, to see an improvement, government would have to focus on the efficient execution of plans for the benefit of the economy and the promotion of job creation.

However, despite these factors, top executives’ confidence in the basic materials sector showed a complete turnaround during the period increasing by 23.2% to a score of 52.5 points, which was primarily driven by a 55.1% increase in confidence in the ability to secure debt or equity capital for business activities and a 37.8% increase in confidence relating to economic conditions.

Overall confidence in obtaining debt or equity capital increased by 8.7% quarter-on-quarter to a score of 52.7 points.

Meanwhile, the technology sector also showed a rebound in confidence, increasing 5.3% to 51.2 points, with a 15% increase in confidence with regard to industry growth expectation and a 4.7% increase in company growth expectations.

Confidence with regard to industrials decreased by 2.9% to 53.4 points as construction companies agreed to pay fines of over R1.4-billion to the Competition Commission in a public collusion and tender scandal, Merchantec said.

“Further, CEOs once again expressed their dissatisfaction with the delays in promised infrastructure spending by government. The fall in sentiment was primarily driven by a 6.4% decrease in confidence in relation to company growth expectations and a 6.2% decrease in confidence relating to industry growth expectations,” Merchantec added.

Merchantec also pointed out that CEOs had expressed mixed expectations regarding South Africa’s performance following the 2014 elections, with only 51.7% believing that the country would perform better.

“Although there was a fair amount of uncertainty relating to the impact of the 2014 elections on the economy, some CEOs noted that any improvements would come as a result of a shift in government spending towards infrastructure as opposed to securing votes,” Merchantec stated.