According to a study released on Wednesday, the first quarter saw a decline in company confidence in South Africa due to prolonged power disruptions and declining household income.
The business confidence index decreased from 38 points in the previous three months to 36 points in the first quarter, according to a poll by the Rand Merchant Bank (RMB) and collated by the Bureau for Economic Research.
Notwithstanding the severity of the power outages and the resulting decline in economic activity, the results could have been worse, but it is nonetheless disappointing, according to a study of 1,050 executives.
The study found that the manufacturing sector’s confidence dropped nine points to 17, a rare low, as a result of severe load shedding and deteriorated infrastructure.
A decrease in trading hours and higher running expenses from diesel generators caused the retail confidence index to fall from 42 to 34.
Eskom, the state-owned electricity company in South Africa, is enforcing the worst rolling blackouts in history, which are pressuring retailers’ profit margins by forcing them to use diesel generators for hours each day and keeping homes in the dark for up to 10 hours a day.