Business confidence on rise for SME owners
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BUSINESS confidence among owners of small and medium enterprises (SMEs) has risen again, albeit marginally, despite various challenges and the difficult economic landscape as a result of the Covid-19 pandemic and the national lockdowns, according to the Business Partners Limited SME Index for the first quarter of this year.
Business Partners International chief operating officer Mark Paper said this week that SMEs were prioritising rebuilding their operations to return to pre-Covid levels.
The Business Partners SME Index and survey measures the attitudes and confidence levels of SME owners and highlights noteworthy changes in business confidence.
Paper said it was positive to note the slight increase in owners’ confidence that their businesses would grow in the next 12 months, from 64 percent in the final quarter of last year to 65 percent in the first quarter this year.
“Over half of those surveyed also feel confident about their business prospects for the year. This is despite the drop in confidence levels that the local economy will be conducive for business growth in the next 12 months (decreasing to 43 percent from 45 percent the fourth quarter 2020),” said Paper.
“Added to this, the index shows that confidence levels in both the private sector and government’s ability to support SME development are low. This may be indicating that the detected level of optimism from business owners and entrepreneurs is not rooted in the economy or external factors, but rather in their own ability to navigate the challenges in their operating environment.”
The findings also suggested that businesses were slowly adapting to the effects of the various Covid-19-related events last year.
When asked whether the Covid-19 pandemic and national lockdown had a negative impact on their business confidence, 55 percent of business owners responded in the affirmative, but still expected normalcy to be restored in their business going forward, up by about 7 percentage points up from last quarter.
Some 28 percent of respondents, down by 8 percentage points, were concerned that they might not survive. When asked about the reintroduction of loadshedding, 50 percent said although it had a negative impact, they were able to work around it.
The survey found that fewer SME owners believed their ability to access business finance would improve over the coming year. At the same time, respondents were placing less importance on access to finance being crucial to the growth and sustainability of their businesses, with its importance decreasing by 5 percentage points.
The regional manager of Business Partners, David Morobe, said confidence in the roll-out of vaccines and the prospect of a reduction in business challenges this year was low, with about 49 percent of respondents believing that the roll-out was too slow to make a difference this year. “Still, there is cautious optimism it will eventually have a positive impact on business … ” said Morobe.