After a decrease to 64% in the fourth quarter of 2020, the business confidence level among small and medium-sized enterprise (SME) owners that their business will grow in the next 12 months increased to 65% in the first quarter of this year, SME specialist risk finance company Business Partners COO Mark Paper reports.
In addition to this positive indicator, recent reports suggest that local SMEs are now prioritising the rebuilding of their operations to return to pre-Covid-19 levels.
“Further, the Business Partners SME index shows that confidence levels in the private sector and government’s ability to support SME development are low. This may indicate that the detected level of optimism from business owners and entrepreneurs is not rooted in the economy or external factors, but rather in their own ability to navigate the challenges in their operating environment,” Paper says.
More than half of those surveyed also feel confident about their business prospects for the year. This is despite the drop in confidence levels that the local economy will be conducive for business growth in the next 12 months, decreasing to 43% from 45% in the fourth quarter of 2020, he notes.
Further, the index findings also suggest that businesses are slowly adapting to the effects of the various Covid-19-related events of 2020.
When asked whether the Covid-19 pandemic and national lockdown had a negative impact on their business confidence, 55% of business owners responded that it had, but that their businesses should be sustainable.
When asked about the resumption of load-shedding, 50% said that, while it had a negative impact on business, they were able to work around it.
Further, fewer SME owners believe that their ability to access business finance will improve over the coming year.
Simultaneously, respondents are also placing less importance on access to finance being crucial to the growth and sustainability of their businesses, with importance levels decreasing by 5%, Paper says.
Meanwhile, confidence in the roll-out of vaccines and resulting prospects for the easing of business challenges this year is low, with about 49% of respondents believing that the roll-out is too slow to make a difference this year, although SMEs are cautiously optimistic that it will eventually have a positive impact on business, which is encouraging, says Business Partners regional manager David Morobe.