Business confidence in South Africa strengthened in the final quarter of 2025, reversing two consecutive declines as easing inflation, political stability and improving global sentiment lifted conditions across most major industries.
The RMB/BER business confidence index rose five points to 44, three points above its long-term average, according to survey results released Thursday. That means 44% of respondents were satisfied with business conditions, up from 39% in the previous quarter.
The rebound aligns with new GDP figures showing the economy expanded 0.5% quarter-on-quarter on a seasonally adjusted basis. “The results suggest that the economy is regaining some momentum after remaining subdued in the middle of the year,” the survey report said.
RMB chief economist Isaah Mhlanga said the improvement was notable for its breadth. “Even among building contractors, the only sector to dip this quarter, sentiment remains close to its long-term average,” he said. “While this is not a step-change, it is a meaningful turn in the right direction.”
The survey period coincided with several positive developments: South Africa’s removal from the Financial Action Task Force greylist, an S&P Global credit rating upgrade, a well-received medium-term budget, and a stable rand supported by a favourable interest-rate environment despite a modest inflation uptick. Those factors helped underpin a more constructive outlook, particularly for firms sensitive to financing conditions.
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Inflation pressures also eased on both the purchasing and selling sides, raising the possibility that price growth could settle near the Reserve Bank’s lower 3% target sooner than expected.
Manufacturing was the standout performer in the quarter. Confidence surged 16 points to 39 — the highest level since 2022 — after three consecutive declines. Production volumes did not rise in parallel, but fixed investment indicators showed modest gains, which economists view as a potentially positive sign for longer-term growth.
Retailers also bounced back following a weak third quarter, with sentiment climbing 11 points to 43. Sales held up well compared with last year’s strong festive season, suggesting steady consumer demand. Wholesaler confidence rose four points to 42, driven by stronger sales of non-consumer goods such as machinery, equipment and industrial supplies.
New-vehicle dealers remained the most optimistic group, with confidence rising to 58 as the sector benefited from a late-quarter policy rate cut to 6.75%.
Building contractors were the only group to tick lower, slipping seven points to 39. But underlying activity improved, indicating the sector’s recovery remains intact despite softer sentiment. “The broader building sector continues to perform well,” RMB and the BER said.
Mhlanga cautioned that the rebound should not yet be viewed as a turning point. “It is too early to celebrate. We need to see this tentative improvement being sustained for a couple of quarters,” he said.
The survey partners added that structural reforms remain critical to ensuring rising demand translates into higher production, investment and job creation. They warned that upcoming policy risks at home and abroad could weigh on confidence.
“Looking ahead, it will be important to see if manufacturing output catches up with sentiment, if retail spending maintains momentum in 2026, and whether building contractors bounce back from this quarter’s dip,” the report said.
