China’s economic slowdown, local exchange rate currency declines, the energy crisis and continued labour and skills issues have led to a quarter-on-quarter drop of 45 percentage points in South African business optimism levels to -40% for the quarter ended September 30, Grant Thornton said on Tuesday.

The 100 South African business executives surveyed in the company’s latest quarterly tracker research, the International Business Report (IBR), had cited the same “disturbing” factors constraining growth prospects as in previous IBRs, while poor government service delivery was, once again, highlighted as having a direct impact on South African privately held businesses.

“Worldwide economic pressures combined with local issues and political instability do not create content, happy, thriving businesses. South Africa needs to buckle down with a strict action plan to get things going – we need a major turnaround and we need it now,” CEO Andrew Hannington said in a statement.
 
The latest IBR further revealed that 59% of South African business executives felt rising energy costs were the greatest constraint to growth, while 50% were constrained by economic uncertainty and 46% by exchange rate fluctuations.

Overregulation and red tape was the nation’s fourth-greatest constraint to business expansion, with 42% of executives lamenting this factor, while the lack of a skilled workforce was affecting 37% of business executives.
 
Just over half of South African businesses confirmed that uncertainty about the future political direction was impacting on business decisions. Of the 52%, nearly two-thirds of business executives were postponing investment decisions, as they awaited greater stability.

Further, 75% of all business owners surveyed were affected by poor government service delivery. This increased by 24% since the third quarter of 2011.
 
“Our local municipalities just cannot seem to get on top of the service delivery issues in South Africa. When basic services are impacting the day-to-day activities within a business, it’s a sign that the real backbone of our infrastructure needs attention,” Hannington said.

Road infrastructure concerns, such as potholes and traffic light issues and the negative impact this has on local business executives was affecting 55% of individuals surveyed.