Over three-quarters of privately held businesses in South Africa are optimistic about 2008, placing South Africa as the ninth most optimistic country out of 34 surveyed in accounting and consulting firm Grant Thornton's 2008 International Business Report.

The survey shows that this is the third year that South African businesses have reported a drop in optimism levels, one percentage point down from last year. However, South Africa remains more optimistic than the global average of +42% (+45% in 2007).

Within South Africa the most optimistic province is Gauteng at +85%, while the least optimistic province is the Western Cape (+67%). Regional breakdowns were not available in previous years.

"It is encouraging that optimism levels remain high, when you take into consideration that some key business indicators such as turnover, profitability, employment, exports and investment in plant and machinery have dropped significantly, some by up to ten percentage points," Grant Thornton South Africa national chairman Leonard Brehm said in a statement.

The report also investigates key business indicators in order to better understand optimism and pessimism levels. The only indicators where growth was noted were selling prices, which rose from +60% to +64%, and investments in new building, which increased from +30% to +34%.

Though preceding years' expectations for increased employment grew steadily, this year's survey shows a decrease in employment expectations by 10 percentage points to +43%. Similarly, expectations for increased turnover dropped 10 percentage points to +72% in 2008.

Gauteng reported the highest expectations for increased employment at +50%. However, both KwaZulu-Natal and the Eastern Cape reported employment expectations of only +37%.

Global optimism
The only other sub-Saharan country to participate in the report was Botswana, whose business optimism increased from +41% in 2007 to +66 in 2008, making it the 14th most optimistic country in the survey.

Sharing the top ranking at +95% are the Philippines and India - while the Philippines reported an increase from +88%, India dropped two percentage points. Philippines business optimism can be attributed to the robust economic growth of recent years and widespread expectations that this momentum will be maintained in 2008.

Poland is the country whose business optimism increased the most, from +42% in 2007 to +78%, in 2008. It is also the most optimistic country in Europe. This high level of business optimism can be attributed to the fact that they joined the EU during the research period.

Global pessimism
Japanese businesses are the least optimistic. In a reversal of the trend seen since 2003, pessimism levels in this year's survey slumped from a balance of –5% to –44%.

The country that dropped the most percentage points in terms of business optimism was Ireland, from +82% to +17%.

Now in its sixth year, Grant Thornton's 2008 International Business Report was conducted among medium to large privately held businesses in 34 countries, covering more than 7 200 respondents.

In South Africa, research was conducted among 300 privately held businesses that employ between 100 and 400 staff.

SAinfo reporter

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