File image: IOL.
JOHANNESBURG - South Africa’s captains of industry sentiment in the first quarter plunged 20.9 percent between the first quarter of 2018 and the second quarter on the back of policy uncertainty and the weak rand.

The Merchantec CEO Confidence Index tanked from 60points in the first three months of the year to 47.4points, a downward spike following the optimism of last quarter's increase in sentiment.

“CEOs cited that there are five major contributors to their change in disposition, the “Zuma Hangover”, uncertainties surrounding expropriation of land without compensation, the VAT increase, the fuel price hikes and the rand/dollar exchange rate volatility,” Sabrina Manikkam, a spokesperson for Merchantec said. Sentiment among chief executives in consumer services sectors recorded the largest decrease, plunging 48.3percent.

Industrials decreased by 28.1percent, moving to a score of 42.59points. Merchantec said the confidence decrease in the industrial sector was primarily driven by decreases in economic conditions and planned investment expectations.

The financial services sector recorded a decrease in confidence of 17.4percent -attributed to a drop in industry growth expectations. The RMB/BER business confidence index released last month fell 6 points to 39points from 45points in the first quarter.