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Johannesburg - In the absence of another turbulent year in the labour market, the economy looks good for growth of around 2.5% in 2015, shows the the latest RMB/BER business confidence index (BCI).
The BCI showed an increase of five points to 51 in the fourth quarter of 2014.
"This is the first time since early 2013 that confidence is back in net positive territory (if only just)," RMB said in a statement on Tuesday.
"A reading of 51 indicates that slightly over half of the respondents are satisfied with prevailing business conditions."
According to the Rand Merchant Bank (RMB) sponsored Bureau for Economic Research (BER) index, released on Tuesday, the business confidence increase stemmed from large improvements in building and manufacturing confidence which, combined, more than compensated for a small decline in retail confidence.
The survey was conducted between October 27 and November 20 and covered 2 900 firms in the building, manufacturing, retail, wholesale, and motor trade.
RMB said the sentiment among wholesalers and new vehicle dealers remained essentially unchanged.
"A hefty 13 point improvement in building confidence saw the index climbing to 66 in the fourth quarter - its highest level since the 2008 recession," said RMB.
"Over the past year the index has risen by nearly 20 points, the bulk of which can be explained by a strong revival in the mood of building contractors in the residential market."
RMB said building contractors in the non-residential property market had had it more difficult in recent years.
Manufacturing confidence bounced back to 42 index points as the adverse impact of the labour strikes dissipated, said RMB.
Domestic sales volumes as well as export sales volumes improved noticeably in the fourth quarter.
"Following a strong increase in the third quarter, sentiment among retailers deteriorated slightly with the index falling by five points, to a still high 55," it said.
"Except for clothing, sales volumes generally accelerated in the fourth quarter."
RMB said the back-to-back increase in the RMB/BER BCI was consistent with an improved GDP picture in the second half of the year.
Statistics SA (Stats SA) announced on Tuesday that South Africa's real gross domestic product (GDP) increased by 1.4% during the third quarter of 2014.
RMB said the apparent fourth quarter recovery in manufacturing production, rising residential building activity, and sustained but modest growth in retail and wholesale sales volumes should all ensure real GDP growth accelerated.
"Closing the year on a stronger foundation is a good starting point for next year," said RMB.
"In the absence of another turbulent year in the labour market, the economy looks good for growth of around 2.5% in 2015 - not a great outcome but nonetheless an improvement on this year."
Stats SA said the main contributors to the increase in the economic activity were finance, real estate and business services, the wholesale, retail, and motor trade, and the catering and accommodation industry, each contributing 0.5%.
General government services contributed 0.3 of a percentage point and the agriculture, forestry, and fishing industry and the transport, storage, and communication industry each contributed 0.2 of a percentage point.
The manufacturing industry had a negative contribution of 0.4%.
