Grant Thornton Survey Shows Record ZA Business Pessimism

Andrew Hannington, the CEO of Grant Thornton Johannesburg, today presented the company’s latest International Business Report – a survey of medium sized businesses about their concerns.

This showed a big fall in SA optimism, to a record low. The optimists were 39% in 2013, 15% last year, and just 9% in Q1 2015. Globally, there was not much change between this year and last.

“SA is in a very pessimistic situation,” said Hannington.

Over half of businesses in SA – 55% – cited rising energy costs as a business constraint.

68% said their business had been negatively affected by poor government service delivery – with water and electricity utilities being the worst culprits.

Tactically, main focus to combat supply disruption and price increases is on staff education to conserve services (68%), followed by investment in alternative energy (61%).

93% say they are worried looming land ownership legislation – the Expropriation Bill, the Promption and Protection of Investment Bill, the Land Act Bill, the Private Security Regulation Bill, the Land Protection Bill, the Mineral and Petroleum Resources Amendment Bill (hope I got all those right) mwill have a negative economic effect, while 90% says it will slow inward investment and lead to disinvestment.

“We need to relook at these Bills and revisit them, so there is a more reasonable approach,” Hannington warned.

91% of respondents had said the dilution of property rights may lead them to go outside SA for new investment.

Crime is still a serious issue in SA. Last year 63.5% of businesses said they or their staff have been affected by crime, with the worst problem in KZN. 80% have increased what they pay on security.

“Despite all the negativity, we at Grant Thornton are very optimistic about South Africa.

“It is not all doom and gloom in South Africa. We do believe that sanity will prevail,” Hannington concluded.

Tweet of the Day:
Bill Murray (@BiIIMurray): Life tip: When nothing goes right go to sleep.

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