Johannesburg – Business confidence in South Africa has fallen again, raising concern for an economy already struggling with weak growth. The RMB/BER Business Confidence Index dropped by one point to 39 in the third quarter of 2025, after a sharper five-point decline in the previous quarter. The result leaves more than 60 percent of business leaders dissatisfied with current conditions.
The survey, conducted between 6 and 25 August, coincided with the introduction of 30 percent tariffs on many of South Africa’s exports to the United States. Economists believe the tariffs, along with political and economic policy shifts, weighed heavily on sentiment.
RMB chief economist Isaah Mhlanga said South Africa’s confidence levels are now below the long-term average of 42, reflecting an economy that is “muddling through.” He warned that the low reading is not strong enough to encourage investment needed to improve job creation and growth. 
While the index appears relatively flat, sector results showed sharp swings. Confidence among building contractors rose by 11 points to 46, while new vehicle dealers registered an improvement to 54, helped by interest rate cuts. In contrast, manufacturers dropped to 23, retailers fell to 32 and wholesalers slid to 38, their lowest in five years.
Mhlanga said conditions in the automotive sector, which faced production holidays and cancelled orders, reflected the impact of US tariffs. He noted that while interest rate-sensitive industries benefitted from a rate cut in July, overall conditions remain tough, with service delivery failures, rising electricity costs, red tape and slow logistics also affecting businesses.
He added that the government’s plan to move towards a 3 percent inflation target could pave the way for more rate cuts when inflation expectations ease. However, he cautioned that without urgent reforms in water, logistics and local government, growth will remain subdued.
Statistics South Africa is expected to release second-quarter GDP figures next week, which economists believe will show modest but broad-based growth. The third quarter, however, is not expected to bring a significant acceleration.
