Some good news for businesses in South Africa

New data from Statistics South Africa (Stats SA) shows that the total number of liquidations in April decreased by 12.7% compared to a year ago.

Voluntary liquidations decreased by 29 cases, while compulsory liquidations increased by nine cases, it said.

Liquidation refers to the winding-up of the affairs of a company or close corporation when liabilities exceed assets and it can be resolved by voluntary action or by an order of the court.

According to Stats SA, the total number of liquidations decreased by 11.0% in the first four months of 2022 compared with the first four months of 2021.

The data also showed that between January and April 2022, there were a total of 600 liquidations – 74 fewer than last year.

The below table highlights the business categories that reported the most liquidations in April 2022.

Financing, insurance real estate, and business services recorded 34 liquidations over the reporting period, while trade, catering and accommodation (32) and construction (13) were the hardest hit.

The South African Chamber of Commerce and Industry (SACCI) Business Confidence Index (BCI) continued on its recovery path after the unrest and disruptions in July 2021. The BCI improved by 2.8 index points between January and February 2022 before conceding 1.3 index points in March 2022 to reach 95.6.

However, the general trend in business confidence during the first few months of 2022 remained positive.

The SACCI BCI fell to 92.0 in the third quarter of 2021 and remained hesitant before rising by 1.2 points to 93.2 in the fourth quarter. After indicating a faster recovery in January and February 2022 as the Covid-19 effect faded, the unexpected Russian war campaign in Ukraine added to global business uncertainty and caused the BCI to slow in March 2022.

The SACCI BCI average in the first quarter of 2022 improved by 2.3 index points from the fourth quarter of 2021 to 95.5, which is 1.2 index points higher than the first quarter of 2021.

In the short term, a higher volume of merchandise imports, an increase in the real value of building plans approved, and more new vehicles sold all contribute to an improved business climate, it said.

Financial services group Absa meanwhile said in a note earlier this month that South Africa’s economic recovery from the pandemic has been stronger than expected, “but a weaker global backdrop and domestic supply shocks are likely to slow the growth momentum”.

Absa forecasts GDP growth of 2.0% this year and 1.7% next year. This is a more optimistic outlook, versus the South African Reserve Bank’s forecast. The SARB said last week that it sees GDP growth lower at 1.7% in 2022, from 2.0% previously, and unchanged at 1.9% in 2023 and 2024. The revision is attributed to load shedding and the floods in KwaZulu Natal.

The first quarter 2022 FNB Property Broker Survey showed improved optimism regarding near-term property sales activity in all three major property classes: retail, office and industrial, compared with the prior quarter’s expectations survey response.

Unsurprisingly, the industrial property class continued to be the one where brokers were most optimistic regarding near-term activity, with demand for this class of property having been the strongest for some time already.

In the industrial property market, greater affordability is implicitly seen as a benefit over the other classes, with significant growth in small businesses seen as a benefit to demand in this market, said FNB.

FNB surveyed a sample of commercial property brokers in the six major metros of South Africa – ie, the City of Joburg and Ekurhuleni (Greater Johannesburg), Tshwane, Ethekwini, City of Cape Town and Nelson Mandela Bay.


Read: New Gautrain routes and expansion coming this week

Source link

Leave a Reply

Your email address will not be published.