BER Occasional Note - September 2023

Could fibre access improve economic outcomes for low and middle-income households in South Africa? Lower communication costs can have a positive growth impact in various respects. Fibre penetration in South Africa’s urban areas has deepened in recent years, and some investors are now looking to high-density townships for the next phase of fibre rollout. In this Occasional Note, we posit that ubiquitous, unfettered, and affordable internet access could positively impact socioeconomic outcomes. BER Macro Clients can access this note here.

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The FNB/BER Civil Confidence Index increased marginally to 43 in 2023Q3, from 41 in 2023Q2. Even though the majority of respondents are still dissatisfied with prevailing business conditions, the current reading is above the long-term average. Underpinning the relative optimism is the continued rise in construction activity and overall profitability.

Conditions in the SA manufacturing sector deteriorated at the end of the third quarter. This is according to the seasonally adjusted Absa Purchasing Managers’ Index (PMI), which declined by 4.3 points in September to 45.4.

After falling to 27 in the second quarter of 2023, the RMB/BER Business Confidence Index (BCI) regained some ground to register a level of 33 in the third quarter. The challenges posed by relatively high interest rates, the resultant strain on consumers, and social unrest meant that business activity remained constrained. Encouragingly, the slight reprieve in the incidence of load-shedding provided support to some firms, especially in manufacturing.

After reaching a low -25 index points in the second quarter of 2023, the FNB/BER Consumer Confidence Index (CCI) rebounded to -16 in the third quarter. There was a remarkable rebound in the confidence levels of high-income households (earning more than R20 000 per month) following an outsized decline during the first half of 2023.