Ilembe business mood plummets

The tourism, catering, accommodation and property management sector took the biggest knock.

Business confidence in Ilembe district has officially sunk to its lowest ever level.

A recent survey of business sentiment has recorded an all-time low of 39,2 index points*, a drop of 25% from mid-2017.

Ilembe Chamber CEO Cobus Oelofse was dejected about the outcome and said there are various factors contributing to the depressed business feeling.

“The credit rating downgrades, an under-performing national economy, concerns about public finances, increasing levels of unemployment and the cost of doing business locally are reflected in the most negative Ilembe Business Confidence Index (IBCI) recorded thus far,” said Oelofse.

The tourism, catering, accommodation and property management sector took the biggest knock, dropping 15,2 points to 40,6 points from mid-2017.

Manufacturing and assembly was the most confident economic sector, followed by construction, property development and property sales.

“The business outlook for January to June 2018 was also recorded at its lowest level since commencement at 48 index points, a disappointing 7.4 index points down from outlooks for the second half of 2017. This six-month business expectations outlook incorporates two golden trading periods, Easter and mid-year holiday periods.”

The only saving grace for some parts of the retail sector was the 2017 Christmas holidays.

“It appears the variety and choice on offer impressed consumers which showed in significant growth in total retail spend. Individual retailers’ feedback however was a mixed bag and reflective of a significantly disrupted market.”

Restaurant and take-aways reported above expected trading, but some well-known restaurants outside of high foot traffic retail areas reported a notable drop in sales.

Enterprise Ilembe’s district accommodation survey for December 2017 showed occupancy levels of 72 percent in KwaDukuza of which 64 percent of overnight visitors were South Africans from outside KZN and 12 percent were international tourists.

Also read: Ilembe blows R1.3m on games

The highest business confidence within the region was Mandeni, home to the Isithebe industrial estate, despite a 12.3 point drop to 41.7 index points.

On the upside, sectors with positive expectations over the next six months are: manufacturing, assembly (58.9): transport, warehousing, storage (57.5); construction, property development, property sales (51.3) and financial and business services including IT and communications (50.3).

Oelofse said president Cyril Ramaphosa‘s first State of the Nation Address last week should offer some reassurances to the business climate.

“The re-industrialisation of the economy is especially exciting, with localisation initiatives and manufacturing capacity, amongst others, already being central to the Chamber’s lobbying efforts in our region’s industrial precincts such as Isithebe. The strengthening of government and the intolerance of corruption are very positive and should have a significant impact on regional business confidence.”

* The neutral level of index points is 50. Points above 50 are a positive sign, with the highest number of points being 100. Below 50 points is a negative slope.

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Elana Geist

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