Business trading conditions worst since 2008/09 recession, according to Sakeliga-ETM report
21 November 2019
Business trading conditions remained weak in the third quarter of 2019 and South Africa’s business conditions currently are at the worst levels since following the 2008 recession, according to Sakeliga-ETM’s Economic Update for Business Decision Makers.
“Business trading conditions in South Africa are in the worst position since the 2008/09 recession. In practice SA reached ‘junk status’ years ago,” says Gerhard van Onselen, senior analyst at Sakeliga. “Although there are currently few signs of a major global downturn,” Van Onselen continues, “operating and earnings conditions in South Africa are very difficult. Harmful policies and red tape have resulted in economic de-development, hampering private investment and entrepreneurship. This situation can be turned around by reducing substantially the role of the state in determining how resources are allocated and distributed.”
According to Van Onselen, businesses struggled to improve their profitability during the third quarter. Demand among consumers and companies was sluggish. In addition, rising state debt is increasing future taxation risk as government maintains high expenditure and runs enormous fiscal deficits.