South African Business Confidence Edges Up in May After April Slump
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South African business confidence edged up in May after a sharp fall in April, as companies adjusted to the oil price shock triggered by the Iran war and vehicle sales remained buoyant, data showed on Thursday. The South African Chamber of Commerce and Industry's Business Confidence Index rose to 124.1 in May from 123.6 in April. It stood at 131.3 in March.
The chamber, which releases the index every two months, said the modest recovery in May suggested some of the negative sentiment triggered by the global surge in energy prices had begun to subside. Business leaders indicated that market conditions were stabilizing after the initial disruption.
It said gains were driven mainly by higher new vehicle sales and stronger merchandise export volumes, with imports also contributing to a lesser extent. The automotive sector showed particular strength as consumer demand remained resilient despite economic pressures.
A decline in overseas tourist arrivals had a substantial negative impact on the index, while rising inflation was also a concern for businesses. The tourism sector's weakness reflected broader challenges in the services industry affecting overall economic performance.
Africa's biggest economy started to pick up pace last year and expanded more than expected in the first quarter of 2026, but the Iran war has dampened the outlook for growth. Economists warn that external shocks could continue to influence future economic trajectories.
