SA tops for business optimism
23 January 2006
Eighty percent of South African business owners are optimistic about the year ahead, according to the 2006 Grant Thornton International Business Owners Survey.
This makes South African business owners the third most optimistic internationally and continues the South African trend of being considerably more optimistic than the global average of 39%.
The research was conducted among 7 000 owners of medium-sized businesses who employ between 50 and 250 people in 30 countries.
In 2005, 84% of SA business owners surveyed by Grant Thornton were optimistic about the year ahead, placing them second internationally.
According to Grant Thornton, this year's dip in optimism levels is consistent with the drop in the global average from last year's 41%. South African levels of optimism are still considerably higher than in previous years (72% in 2004, 34% in 2003)
At 93%, up from 88%, India is the most optimistic country for the second year running. Ireland jumped from third to second place with 84% optimism, and mainland China, surveyed for the first time, has the fourth most optimistic business owners at 77%.
"Now in its fourth year, IBOS has recorded the dramatic increase in levels of optimism amongst South African business owners over the years," Grant Thornton South Africa chairman Leonard Brehm said in a statement.
"The current levelling of the results does not come as a surprise to us. It is important to remember that South Africa consistently remains near the top of the log."
In line with the decrease in overall optimism among South African business owners, the research reports a slight drop in expected levels of turnover (71%, down from 75% in 2005) and profitability (54%, down from 61% in 2005) for the year ahead. South African levels of expectation still remain higher than the global average of 62% and 29% respectively.
And despite the strengthening rand, 18% of business owners still expect increased exports for South Africa, up from 17% in 2005.
Overall, the survey shows that business owners in 26 out of 30 countries are optimistic about their economy's performance. In 13 countries, optimism has improved over 2005.
However, in a range of major G8 economies - including the US, Canada, UK, France and Italy - the mood is now certainly less confident, with four of the biggest drops in confidence coming from G8 countries.
"In the UK, higher interest rates and taxes have reduced disposable income and consumer spending has slowed more abruptly than expected," Brehm said. "Economic growth has slowed to its slowest since 1992 and optimism has fallen sharply. The UK confidence figure is now below the overall EU figure for the first time for many years."
Business owners in Taiwan are the most pessimistic about their country's economy, according to the survey, followed by Japan, Botswana, Italy and France.
SouthAfrica.info reporter
