70% of SA CEOs Cautiously Optimistic for 2025 GDP Growth at 1.5% Amid Slight Confidence Drop

The CEO Confidence Index recorded a 2% decrease between Q3 2024 and Q4 2024, reaching a score of 53.9. Despite this decline, 68% of CEOs still anticipate South Africa’s GDP growth rate for 2025 to be 1.5%, while 32% expect it to exceed 1.5%. This indicates cautious optimism among South African business leaders, driven by recent positive economic developments.

In the Q3 2024 questionnaire, CEOs had expected South Africa’s GDP growth rate to be 1.5% on average. The bonus question for this quarter asked CEOs: “In light of recent positive economic developments, do you still anticipate South Africa’s GDP growth rate for 2025 to be 1.5%, or do you now expect it to be different?” The responses indicate a shift in sentiment, with a significant portion of CEOs now expecting higher growth.

CEOs have expressed that the recent improvements in the business environment and economic policies have given them more confidence in the potential for higher growth. They noted that while challenges remain, the positive developments in infrastructure and governance are encouraging signs for the future. One CEO mentioned that the stability in the political landscape has also contributed to their optimistic outlook. Another CEO highlighted that the increased focus on renewable energy projects is expected to drive economic growth and create new opportunities.

Several CEOs commented on the impact of the Government of National Unity (GNU), noting that while it is too soon to see any real difference, the GNU has made substantial improvements where they can. However, corruption remains a systemic issue that holds back growth and investment. Some CEOs believe that the recent positive sentiment will take time to translate into higher GDP growth, possibly by 2026. Others emphasised the need for policy changes, particularly in areas like BEE, NHI, and foreign policy, to foster real investment and growth.

Consumer Staples recorded a 10% increase moving to a score of 68.13. This was primarily driven by a 18 % increase in confidence relating to their ability to secure debt/equity capital for business activities and a 15% increase in industry growth expectations.

Financials saw a 4% increase in confidence. The increase in sentiment was primarily driven by a 14% increase in confidence relating to economic conditions.

Information Technology recorded a decrease in confidence for the fourth quarter of 2024, down 3% from 63.93 to 62.14 points. The drop in sentiment was primarily driven by a 19% decrease in confidence relating to their ability to secure debt/equity capital and a 12% decrease relating to industry growth expectations.

Health Care recorded a decrease in confidence, down by a significant 15% from 62.5 to 53.33 points. The drop in sentiment was primarily driven by a 27% decrease in confidence relating to company growth expectations.

Materials recorded a decrease in confidence, dropping by 7%. The decrease in sentiment was primarily driven by a 18% decrease in confidence relating, a 12% decrease relating to their industry growth expectations and a 20% decrease relating to their planned level of investment.

Consumer Discretionary went up by 1% moving to a score of 61.15 points.

Real Estate recorded the second highest decrease in confidence dropping to a score of 67 points. The drop in sentiment was primarily driven by an 8% decrease in confidence relating to their company growth expectations, and a 13% decrease in confidence relating to their planned level of investment.

Industrials saw an 4% increase in confidence moving to a score of 64.62 points. The rise in sentiment was primarily driven by a 12% increase in confidence relating to their planned level of investment

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.