Confidence Rebounds
Majority of the CEOs Embrace AI

The AI wave has officially hit South African boardrooms. In Q4 2025, nearly three-quarters of CEOs (74%) reported that their organisations are actively investing in AI tools to boost productivity and efficiency. This coincides with a clear resurgence in business confidence.

This surge in AI adoption comes as overall CEO sentiment rebounds. After a challenging third quarter, the Merchantec CEO Confidence Index climbed to 49.5, reflecting a more optimistic outlook and a growing appetite for innovation. Many CEOs described AI as integral to their product offering and transformative to the way they do business. Leaders are already using AI for report writing, communication, automated ordering processes, and enhanced fraud detection. One CEO shared, “We use AI extensively to increase productivity,” while another noted, “AI is helping us lay the groundwork for broader integration and increased usage across operations.”

Importantly, this momentum is driven by more than hype. CEOs highlighted tangible benefits such as sharper decision-making, faster turnaround times, and the ability to achieve more with fewer resources. One respondent emphasised, “AI is now a competitive necessity, and those who hesitate risk falling behind.”

A cautious minority (26%) remain on the sidelines, citing budget constraints, skills shortages, or a wait-and-see approach. Some are exploring AI’s potential but remain hesitant to commit before seeing proven returns. As one CEO explained, “We are not spending a lot of money yet, but we are exploring what AI can do for us in finance and sales.”

The verdict is clear: AI is no longer a futuristic ideal. It is a present-day business imperative, and South African CEOs are leading the shift toward a more automated, data-driven future, supported by renewed optimism.

The Merchantec CEO Confidence Index (CCI) staged a strong comeback in Q4 2025, climbing to 49.5, just shy of the 50 “neutral” mark that separates pessimism from optimism. This marks a significant rise from the Q3 low of 40.1 and a notable recovery from the start-of-year dip when confidence fell to 45.2 after ending 2024 at 53.9.

CEOs are lifted by easing macroeconomic pressures, a renewed appetite for investment, and growing optimism around AI growth. Industry sentiment improved across most sectors, with leaders reporting stronger-than-expected demand and a more stable operating environment. Company growth expectations rose notably in Real Estate ,Financials, and Health Care, while access to capital and investment plans also showed broad-based gains.

While leaders remain mindful of ongoing risks such as policy uncertainty, infrastructure challenges, and global market volatility, the mood has clearly shifted. South African business leaders are regaining their footing and looking ahead with renewed confidence.

Real Estate rebounded to 60.0, with leaders citing improved funding conditions and a more positive outlook for property demand. While the residential market shows clear signs of recovery, some uncertainty remains in the commercial segment. This recovery is visible in areas like Sandton, where new residential and mixed-use projects are reshaping the skyline, signalling renewed investor and developer confidence.

Consumer Discretionary rebounded to 64.4 in Q4. CEOs reported stronger investment sentiment and a pickup in consumer demand, though some caution remains around costs and competition. The sector ends the year on a more optimistic note.

Consumer Staples  rebounded to 55.5 in Q4. CEOs reported stabilizing input costs and gradual improvements in supply chains, though demand remains subdued in some categories. Many leaders are cautiously optimistic, noting that efficiency gains and cost management are starting to pay off.

Financials led the pack, surging to 68.9, the highest among all sectors. CEOs cited improved credit conditions, robust investment sentiment, and renewed optimism in lending and capital markets. The sector benefited from increased deal activity and a more favorable regulatory environment.

Health Care continued its upward trend, reaching 61.3. Leaders highlighted increased demand for health services, ongoing innovation, and sector-specific opportunities. Investment in new technologies and expansion of service offerings contributed to the positive outlook.

Industrials climbed to 59.3, reflecting resilience and increased project activity. CEOs pointed to better-than-expected demand in several sub-sectors and noted that investment sentiment has strengthened as supply chain disruptions eased.

Information Technology advanced to 59.0. CEOs reported steady deal flow, strong demand for digital solutions, and growing confidence in the sector’s innovation-driven growth. Many organisations are ramping up AI and automation initiatives.

Materials rose to 55.0, with CEOs pointing to stabilisation in commodity prices and renewed export opportunities. However, concerns about global market risks and fluctuating demand persist, keeping sentiment measured..

Utilities climbed to 61.0, reflecting improved infrastructure investment and a more stable regulatory environment. CEOs remain cautiously optimistic, but note that long-term challenges, such as aging infrastructure and regulatory complexity persist.

More about the Merchantec CEO Confidence Index

The Merchantec CEO Confidence Index, which consists of five components, collates views from CEOs of top South African companies and therefore provides a leading indicator into how business leaders perceive local market conditions and the economy going forward.

The Merchantec CEO Confidence Index is a copyright report prepared quarterly by Merchantec Capital. The survey collates responses from over 1 000 top CEOs, from the listed and non-listed environment.