The Absa small and medium enterprise (SME) index rose slightly over the last quarter of last year and was 1.4 points off its low of 92 reached in the second quarter of the same year, the bank said yesterday.
This can be attributed to the growth of self employment, which translates to an estimated 1.2 million self-employed business people.
Self employment grew by 1.1 percent in the last quarter and overall by 2 percent in the last year, Absa said.
Sisa Ntshona, the head of enterprise development at Absa, said the index was extrapolated for Statistics SA’s information on various economic indicators that were issued regularly.
“The Absa SME index provides valuable information that allows SMEs to make better informed decisions with access to solid and reliable information that will help them to grow their businesses. The Absa SME index also allows policymakers to make relevant policy decisions on SME development, high unemployment and job creation,” he said.
Speaking at the publishing of the third quarterly SME index results, Mike Schussler, an economist who worked on the index in partnership with Absa, said SMEs were also benefiting from low interest rates.
He added that in future some further help should come for SMEs from tax relief for smaller companies, which was positive for business formation and sustainability.
He said employer numbers disappointed as wildcat strike action and slow growth made employment a riskier option.
Schussler said: “Employer numbers had a year-on-year decline of 2.1 percent, while over the last quarter the decline was a little smaller at 0.2 percent.”