Investment and business services provider Merchantec Capital’s CEO Confidence Index improved to 60 in the first quarter of this year, moving above the neutral 50-point mark for the first time since the first quarter of 2017.
Economic conditions and industry growth were the biggest contributors to the massive leap in CEO confidence, with most CEOs having indicated that the election of South Africa’s new President Cyril Ramaphosa has had a positive impact on their business.
Another contributor to the improvement in CEO confidence was the staving off of the junk status by ratings agency Standard & Poor’s.
However, Merchantec reported that some CEOs are still sceptical about economic growth prospects following policy changes such as the increase in Value Added Tax as well as the rumblings of land expropriation without compensation.
Meanwhile, the financial sector recorded the largest increase in confidence, with a 105.3% increase in confidence relating to economic conditions and an increase of 71.1% in industry growth expectations.
The industrial sector made a significant comeback, increasing to 59.27 index points.
Consumer services’ CEO confidence increased by 40.7%, which was driven by a 143.1% increase in confidence relating to economic conditions.
The CEO Confidence Index collates views from more than 1 000 CEOs of top South African companies and, therefore, provides a leading indicator into how business leaders perceive local market conditions and the economy.