Categories Business Tech World Car sales, manufacturers smile as business confidence soars in Q1 Post author By vanirexodus Post date March 10, 2022 No Comments on Car sales, manufacturers smile as business confidence soars in Q1 Business confidence rose in the first quarter of 2022 from an unchanged 43 points in the fourth quarter to 46, close to neutral 50 in the second half of last year. New car dealerships, wholesale and manufacturing all showed improvement. According to the RMB/BER Business Confidence Index (BCI), the 46 points is encouraging as it is equal to the long-term average of the BCI. It is also different from the low of 5 at the peak of the Covid-19 pandemic in 2020. The survey was conducted between February 9 and 28 of 1,300 senior executives in construction, manufacturing,… Business confidence rose in the first quarter of 2022 from an unchanged 43 points in the fourth quarter to 46, close to neutral 50 in the second half of last year. New car dealerships, wholesale and manufacturing all showed improvement. According to the RMB/BER Business Confidence Index (BCI), the 46 points is encouraging as it is equal to the long-term average of the BCI. It is also different from the low of 5 at the height of the Covid-19 pandemic in 2020. The survey was conducted between February 9 and 28 of 1,300 senior executives in the construction, manufacturing, retail, wholesale and auto trade sectors, mainly using questionnaires submitted before Russia invaded Ukraine, the price of oil soared to more than $120 a barrel. and stage 4 load shedding returned. ALSO READ: Business confidence ahead of production dips, but there is hope Increased business confidence in these quarters New car dealerships registered the largest increase after falling from 47 to 41 in the fourth quarter of 2021. Sentiment recovered to 54 in the first quarter. Improved supply helped increase sales, but dealers said they were unable to fully meet demand as inventories remained below satisfactory levels. Wholesale confidence increased slightly to 57. While consumer goods sales were weaker, sales of non-consumer goods such as machinery and chemicals were boosted by favorable conditions in the agricultural and mining sectors. Business confidence in the manufacturing sector also improved, jumping from 38 to 43 on the back of strong domestic sales and exports. However, production could have increased further but was impacted by ongoing supply chain bottlenecks and shortages of essential inputs. ALSO READ: Business confidence unchanged after decline in third quarter These sectors have lost business confidence On the other hand, business confidence among retailers fell from 52 to 49, while confidence for contractors fell to 25. Retailers of non-durables lost most confidence as sales fell on the back of rising food price inflation. Higher income earners also shifted their spending to takeaways and eating out rather than food and groceries for home consumption and entertainment, which became a notable trend during the lockdown. It also appears that sales of durable goods, such as hardware and building materials, which have hitherto been driven by home additions and renovations, have peaked, while sales of furniture, appliances and electronic equipment have continued to perform strongly and sales of semi-durable goods such as clothing and footwear are making a comeback. Business confidence among prime contractors fell to 25 in the first quarter as a result of: Oversupply of office and in some cases retail space Delays in building plans approval Delays and even suspensions of tenders Weak demand for new detached houses, which have become increasingly expensive compared to existing houses, which are still experiencing moderate price inflation. Subcontractors, on the other hand, continued to benefit from factors such as refurbishing office buildings and/or converting them into multifunctional sites. ALSO READ: Confidence in hotels and restaurants peaks before Omicron . setback Reasonable rebound Ettienne le Roux, chief economist at RMB, says the economy showed a reasonable recovery in the fourth quarter, growing 1.2% compared to the previous quarter, indicating that the impact of the Numsa strike, the tax reduction in November and the presence of the Omicron variant. Underlying demand conditions remained relatively strong in the first quarter, especially in the case of new vehicle trade, some retail and manufacturing segments. Le Roux says the improvement in sentiment points to economic recovery, which was temporarily interrupted in the third quarter of last year and will continue into 2022. “However, the stagflationary shock caused by the Russian invasion of Ukraine has now led to significant uncertainty and downside risks surrounding the global growth outlook and with it implications for South Africa’s gross domestic product (GDP) growth prospects. This is very unfortunate, as it comes at a time when the economy appears to be well on its way to a full recovery from the significant production losses incurred in 2020.” ALSO READ: Riots hurt business confidence less than Minister of Finance Des van Rooyen Business confidence is heading in the right direction The economic research group Oxford Economics Africa said in response that while the BCI remains below the neutral 50 level, the index is moving in the right direction and has matched its long-term average of 46 points. “After the latest GDP results, which showed the South African economy to recover in the last quarter of 2021, the latest BCI results bode well for real GDP in the first quarter. However, it is likely that this optimism will be short-lived given the uncertainty surrounding the conflict in Ukraine.” Le Roux says renewed global disruptions and heightened risk aversion could spoil the party for South Africa, where the risks of stagflation are mounting. “Rising international oil prices will put upward pressure on domestic inflation, while the risk of a slowdown in global growth should lead to weaker external demand, potentially offsetting the impact of the favorable price shock for key exports.” ← ATM is going to challenge open voting decision → Carl the toy soldier? Niehaus fails Umkhonto we Sizwe login credentials test Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment.