South African business owners are, surprisingly, among the world’s most upbeat about economic prospects — but are also concerned about red tape and bureaucracy as brakes on growth.
This emerges from Grant Thornton’s international business owners survey, covering more than 6 000 companies in 19 countries.
Released late last week, the survey was conducted in September/October — a time of economic and political uncertainty, when global economic recovery was losing impetus, stock markets were falling from their 2000 peaks and the threat of war and terrorism was weighing down investor and consumer confidence.
Over all, the survey finds business owners subdued about prospects for the year ahead, with United States businesses among the most buoyant and Japanese and German respondents extremely pessimistic.
South African busines owners feature among the most upbeat surveyed, with an optimism/pessimism balance of +34%.
Eighty percent of South Africans surveyed are positive about turnover prospects over the next 12 months, indicating a ”high degree of confidence in the short-term prospects” for the local economy.
In an overall context of global caution, South African owners also expressed the most confidence that exports would rise in the coming year (36%, compared to 17% for the US).
The survey says that this reflects the ongoing boost from the rand depreciation and expectations that commodity-based exports would do well.
South Africans also voiced strongly positive expectations about selling prices and profitability.
On the employment front, South Africa surprisingly showed the sharpest increase in job expansion over the preceding year. The balance of +49% was notably higher than that in the second-placed country, Spain.
However, a darker picture emerges of perceived ”constraints on expansion plans”. South Africans are among the most concerned that regulations and red tape will cramp company growth.
About 44% of South African respondents saw regulations/red tape as a problem — behind only Singapore, Russia and Germany. The survey comments that Russia’s performance is ”still affected by the approach that characterised the economy pre-1989, although liberalisation is under way”.
South Africans are also among the most concerned that bureaucracy will constrain international expansion. Thirty-eight percent of respondents saw this as a potential constraint, behind only Russia, Germany, Singapore, Hong Kong and Mexico.