Confidence slips, pressure rises for SA’s mid-market 

• Business confidence drops: The RMB/BER business confidence index (BCI) slipped to 39 in Q3.25 from 40 in Q2, with 61% of businesses dissatisfied with operating conditions. 

• Global headwinds: US tariffs and the loss of most benefits from the African Growth and Opportunity Act (AGOA) hit South Africa’s exports, especially in automotive and agriculture, with a projected -0.1% drag on GDP. 

• Sector strain: Confidence fell sharply in the manufacturing, retail and wholesale sectors, while vehicle dealers and building contractors showed resilience. 

• Structural issues persist: Rising electricity costs, red tape and municipal service delivery failures are compounding pressures on firms. 

• GDP outlook: Investec forecasts 0.9% growth in 2025, rising to 1.5% in 2026 with some state support for industries affected by US tariffs.  

• Mid-market impact: Smaller firms, with tighter margins, must act decisively, diversifying exports, improving efficiency and targeting resilient sectors to survive and grow. 

   

In August 2025, as businesses across South Africa grappled with a shifting global trade environment, the BCI survey painted the mood in stark numbers. The index slumped further into depressed territory, falling to 39 in Q3.25, down from an already weak 40 in Q2 (with 50 a neutral level of confidence and above 50 positive). 

Behind the numbers lies a deep unease. Over six in ten businesses reported being dissatisfied with prevailing conditions. According to the Bureau of Economic Research (BER): “The current level of confidence is insufficient to drive an acceleration of much-needed investment to improve South Africa’s potential economic and employment growth rates.” 

This drop in sentiment did not occur in a vacuum. Between 6–25 August, when the survey was conducted, the US pressed ahead with tariffs on South African exports, effectively ending the country’s access to most AGOA trade benefits. Automotive and agricultural sectors, long stalwarts of mid-market participation, were among the hardest hit.

While some metals and minerals escaped the protectionism, the uncertainty rattled boardrooms. The BER said: “While survey respondents mentioned the tariffs, it remains difficult (yet) to disentangle the impact on production and trade.”  

For manufacturers, global trade tensions piled on top of existing challenges. Their confidence index tumbled to 23 points, a ten-point slide from Q2. The picture was no better for retail and wholesale trade, which each shed over ten points, reflecting squeezed consumers and fragile supply chains.

By contrast, new vehicle dealers posted a surge in confidence, rising to 54, while building contractors improved to 46. These sectors, though still vulnerable, hint at resilience amid broader weakness.

She continues, "That said, some lift may reflect the recent series of interest rate cuts – a factor also supporting vehicle dealers." 

For manufacturers, global trade tensions piled on top of existing challenges. Their confidence index tumbled to 23 points, a ten-point slide from Q2. The picture was no better for retail and wholesale trade, which each shed over ten points, reflecting squeezed consumers and fragile supply chains.

By contrast, new vehicle dealers posted a surge in confidence, rising to 54, while building contractors improved to 46. These sectors, though still vulnerable, hint at resilience amid broader weakness.

Looking forward, Investec forecasts GDP growth of 0.9% in 2025, climbing modestly to 1.5% in 2026.

 For Bishop, the trajectory depends heavily on government action: “We have factored in a negative effect on GDP growth of -0.1%, depending on the mitigating strategies put in place.” 

The lesson for the mid-market is clear: resilience cannot wait for policy fixes alone. Firms must prepare for volatility as the “new normal”.