Nearly two-thirds of South African business executives are delaying their investment decisions, while almost half are considering investing offshore, owing to uncertainty regarding the future political direction of the country.
These were the findings of the latest Grant Thornton International Business Report (IBR) for the first quarter of this year.
Grant Thornton calculated business optimism by measuring the percentage of respondents who reported a positive outlook and deducting the percentage who reported a negative outlook for the year ahead.
In the first quarter of this year, there were 41% more negative outlooks expressed than positive outlooks and, for the first time since 2012, global business optimism fell to a three-year low. “
For domestic business executives, rising energy costs were considered the biggest constraint to growth and expansion.
Fifty-four per cent of businesses stated that economic uncertainty was limiting growth, while 53% cited exchange rate fluctuations as a key constraint. Forty-four per cent of local businesses said regulation and red tape was a constraint to business expansion, while a lack of a skilled workforce was constraining 35% of business executives’ growth plans.
Sixty-nine per cent of businesses reported that they had been negatively impacted by poor government service delivery. The second biggest challenge for 65% of organisations in the IBR survey was strikes by government employees.
“A common feature of the most dynamic and successful firms is that they don’t let the noise from external factors out of their control distract them from looking at their own operations, and they continue to invest in the pursuit of growth years down the line. “
