South African Business Confidence Shows Slight Recovery After April Decline

Saranya Sri
June 11, 2026
Business

Confidence Improves After Sharp Fall

South Africa business confidence improved slightly in May after a sharp decline in April, as companies adjusted to higher oil prices linked to ongoing Middle East tensions and vehicle sales remained resilient. Data released on Thursday by the South African Chamber of Commerce and Industry (SACCI) showed the Business Confidence Index edged higher during the month, signalling cautious optimism among businesses despite continued geopolitical and economic uncertainty.

The modest rebound follows a significant drop in confidence earlier this year, when rising fuel costs, weaker trade activity and concerns over the economic impact of the Iran conflict weighed heavily on sentiment.

Oil Prices and Global Tensions Continue to Weigh

SACCI said firms appeared to be adapting to the higher energy price environment, while strong vehicle sales provided support to economic activity. South Africa’s economy has faced increasing pressure from global instability, particularly from disruptions in energy markets caused by conflict in the Middle East. Oil prices have remained volatile in recent months, raising transport and production costs for businesses across multiple sectors.

Manufacturers and retailers have also warned of weaker consumer demand as inflationary pressures continue to affect household spending.

Manufacturing Sector Shows Mixed Signals

A recent purchasing managers’ index survey showed factory activity slowed in May, although the sector remained in expansion territory for a second consecutive month. Despite the challenges, analysts say South Africa’s economy has shown some resilience, helped by improving gross domestic product growth in the first quarter and relatively stable inflation expectations.

The rand has also strengthened at times in recent weeks following stronger-than-expected economic data.

Inflation Risks Remain a Concern

Business leaders, however, remain concerned about the longer-term impact of geopolitical instability and higher fuel costs on investment and growth prospects. South Africa’s central bank has previously warned that the Iran conflict presents upside risks to inflation and could influence future interest rate decisions.

Economists say sustained improvements in confidence will likely depend on easing global tensions, stronger domestic demand and continued policy stability from the government.

South Africa Outlook Remains Cautiously Positive

While May’s improvement was modest, the latest figures suggest businesses may be gradually adjusting to difficult economic conditions after the sharp deterioration seen earlier in the year.

Analysts expect business confidence to remain sensitive to developments in global energy markets and domestic economic reforms in the months ahead.