The level of optimism among South African small and medium enterprises (SMEs) is attaining its highest record in ten years.
But the current load shedding may have put a damper on things.
This is supported by the First Quarter (Q1) 2022 SME Index conducted by Business Partners Limited, a specialized SME financier.
In the first quarter of this year, the SME Index, which assesses business confidence in relation to labor regulations, access to finance, state-level policies, and larger socioeconomic realities, showed an overwhelming favorable sentiment.
The SME Index’s overall findings indicate that SMEs have survived the worst of the pandemic.
A strong year-over-year (y/y) increase of 34 percentage points and a 24 percentage point increase from the fourth quarter of 2021 can be seen in the small firms’ 77 percent confidence that the current economic conditions are favorable for business expansion.
The likelihood that business owners will find employees with the necessary qualifications and expertise to support their company’s expansion has reduced by 5 percentage points year over year.
In this environment, business confidence levels have been steadily declining, falling by 14 percentage points in the fourth quarter of 2021.
“All results point to the fact that South African SMEs are working hard to recover their pandemic losses,” said Business Partners Limited’s Financial Director, Rayna Dolphin.
The executive believes the research is an encouraging one that correlates strongly with the further lifting of lockdown restrictions during the first few months of the year.
“Now, as the SME Index highlights, a renewed focus needs to be placed on skills development and creating an enabling environment in which SMEs can thrive,” it said.