Chief executives officers of large South African companies are confident about growth prospects, a survey published on Tuesday found.
”Although CEOs are overall less optimistic about their specific industry’s growth, and despite beliefs that the general economy has deteriorated compared to six months ago, they are still confident that their companies could achieve moderate growth in the next six months,” the Merchantec CEO Confidence Index found.
The index also revealed that CEOs considered their ability to obtain equity or debt funding as moderately worse than six months ago.
”This could be attributed to, among others, the ever-tightening credit facilities in South Africa as well as investors exiting risky investments, such as equity stocks, and moving into investments with less risk, said Merchantec’s Craig Margolius.
A considerable number of CEOs were planning to increase the level of investment in their companies’ business activities, the survey found.
”It is clear that companies are anticipating the market to recover and are therefore aiming to better position themselves to take advantage of this upswing,” Margolius added.
Confidence of CEOs in the construction and materials sector scored 67, the highest of all the sub-sectors, which highlighted their optimism about the future.
”This optimism could stem from ongoing infrastructure projects.
”It will be interesting to see how this sector’s confidence may fluctuate in future results,” Margolius said.
While lower fuel prices and interest rates were expected to have a positive impact on consumer spending, this was not yet being reflected in the confidence of CEOs in the personal and household goods and technology sub-sectors, which scored the lowest of all the sub-sectors — perhaps as a result of persistent relatively high inflation, the survey found. — Sapa