A new survey shows that South Africa’s business confidence rose in the fourth quarter of the year, as easing of COVID-19 lockdowns in the past few months led to a resurgence in economic activity.

The Rand Merchant Bank (RMB) business confidence index (BCI), compiled by the Bureau for Economic Research jumped to 40 points in the fourth quarter from 24 points in the previous quarter.

Confidence among retailers and wholesalers rocketed during the quarter, clocking a better improvement than during seasonal Black Friday and festival holiday sales periods, the survey showed. Retailers also benefited from the shift in consumer spending toward ready-made meals and work-from-home equipment.

The survey though raised concerns that supply chains need to catch up more strongly to meet demand so as to ensure upward trend in confidence lasts.

“Although the surge in business confidence is encouraging, it only signifies an economy that’s out of intensive care, and not out of high care,” Ettienne Le Roux, chief economist at RMB said.

South Africa’s central bank has warned that a massive rise in projected government debt and problem mortgages posed a “major threat” to the country’s financial stability.

South Africa’s economy was in recession even before the pandemic struck in March and led to strict lockdowns that sunk it to its knees.

Africa’s most industrialised nation has the highest rate of positive COVID-19 cases on the continent, with more about 780,000 confirmed cases and over 22,000 deaths.

The survey was conducted online between October 5 and November 16, covering about 1,800 executives across building, manufacturing and the domestic trade sectors.

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