The Merchantec CEO Confidence Index, for the third quarter of 2022, recorded a 14% improvement in CEO confidence between the second and third quarters of 2022, with the index now at 54.6 - just above the neutral score of 50.

The index, which comprises five components, collates views from CEOs of top South African companies on a quarterly basis, providing an indicator into how business leaders perceive local market conditions and the economy going forward by sector.

The overall third quarter upturn is supported by an increase in confidence across all six sectors measured, namely basic resources, technology, consumer services, consumer goods, financials and industrials.

“The quarter’s Merchantec CEO Confidence Index covered the correlation of CEO's confidence to the availability of Internet access to promote digital inclusion,” the index points out.

In August, Google’s Equiano subsea Internet cable landed at Melkbosstrand, in Cape Town, which is expected to have a direct impact on connectivity throughout the Southern Africa region, with faster Internet speeds, reduced Internet prices and improved user experience.

Further, government aims to ensure all citizens have access to digital technology and services by 2024.

“Businesses across most sectors will be positively influenced by these industry trends as over 79% of CEOs responded that an increase of Internet access will benefit their business, citing an increase of education, use of social media platforms and business systems as contributing factors.”

The basic resources category significantly increased in confidence by 41%, to 54.17 points, during the quarter under review, compared with 38.33 points in the second quarter, generally attributed to confidence in company growth expectations.

Technology recorded an increase of 13% in confidence, while the financials score increased to 59 points, also representing a 13% boost.

Consumer services obtained the second-highest increase of 26% to 58.57 points, driven by a 43% increase in confidence relating to industry growth expectations, while consumer goods saw a slight drop in confidence by 4%, owing to a 16% decrease in confidence relating to planned level of investment.

Industrials increased by 8%, as a result of a 27% increase in confidence relating to economic conditions and a 13% increase in the confidence relating to the ability to secure debt and equity capital.