JOHANNESBURG, June 11 – South African business confidence recovered slightly in May after a sharp decline the previous month, as firms adjusted to higher energy costs and continued strength in vehicle sales helped support sentiment.
According to the latest Business Confidence Index released by the South African Chamber of Commerce and Industry, confidence rose to 124.1 in May from 123.6 in April.
Despite the improvement, the index remained below the 131.3 level recorded in March, highlighting the continued impact of global economic uncertainty on business activity.
The chamber said the modest rebound suggests that some of the negative sentiment triggered by the recent surge in oil prices has started to ease.
Global energy markets have remained volatile following geopolitical tensions in the Middle East, with higher fuel costs increasing operating expenses for businesses across multiple sectors.
According to the report, stronger new vehicle sales and increased merchandise export volumes were among the main drivers behind the improvement in confidence during May.
Imports also contributed positively, although to a lesser extent.
Vehicle demand has remained relatively resilient despite rising inflationary pressures and concerns about the broader economic outlook.
Export activity has also provided support for business sentiment, benefiting from continued demand for South African goods in international markets.
However, the report highlighted several areas of concern.
A decline in overseas tourist arrivals weighed heavily on business confidence, reflecting ongoing challenges facing South Africa’s tourism sector amid global economic uncertainty and elevated travel costs.
Rising inflation also remains a significant concern for businesses, particularly as higher fuel and transport costs continue to filter through the economy.
The latest data comes as South Africa navigates a complex economic environment marked by stronger-than-expected first-quarter growth alongside mounting external risks.
Africa’s most industrialized economy expanded faster than expected during the first quarter of 2026, supported by growth across most sectors.
However, policymakers and economists have warned that the economic fallout from the Middle East conflict could weigh on growth prospects in the months ahead through higher energy prices, inflationary pressures and weaker consumer demand.
While May’s increase in business confidence points to some resilience among South African firms, the broader outlook remains closely tied to developments in global energy markets and the trajectory of inflation.
Businesses will be watching closely for signs that energy prices stabilize and that economic conditions improve further during the second half of the year.
