Business certainty up
EXECUTIVES of middle-market companies the world over are more optimistic about business conditions and opportunities than last year, including in South Africa.
This is according to the annual global EY Growth Barometer 2018 survey, which showed that one in three South African middle-market companies predict growth above 10% for the coming year.
This finding, released yesterday, “is well above the International Monetary Fund’s GDP forecast that South Africa’s economy will expand by 1,5% this year”, according to a statement from EY.
The annual survey of 2 766 middle-market executives across 21 countries showed that global confidence in business growth has strengthened in the last 12 months, particularly in South Africa.
“Business confidence has soared since Cyril Ramaphosa was elected in February as the country’s president,” said EY Africa Growth Markets Leader Azim Omar.
“Economic growth forecasts are stronger, where last year there was a risk that we were heading for a recession,” said Omar.
In South Africa, the data showed that 58% of middle-market companies are targeting growth between six to 10%, which compares favourably with only 32% of companies having the same ambitions a year ago.
A further 30% are targeting growth in excess of 10%, a marginal increase from 2017, when 24% of companies were in this high growth band.
Only 12% of respondents in 2018 expect a decline in growth, compared with 44% in 2017.
Intelligent automation and machine learning have moved centre stage as vital enablers to middle-market growth.
Attitudes toward new technology have evolved. In 2017, 64% of South Africa middle market CEOs said they would never adopt robotic process automation, yet just 12 months later 75% of respondents said they are already adopting or planning to adopt artificial intelligence (AI) within two years.
More than four out of 10 (43%) South African respondents plan to increase their full-time staff numbers — in line with the rest of the BRICS (43%), but above elsewhere (38%).
However, three out of 10 (30%) are more cautious and are looking to maintain current levels, versus 22% in the rest of BRICS.
Slow or flat global growth is a major a concern for local middle-market companies, with 27% of leaders naming it as the biggest external risk to growth, up 15%e points on last year.
“This is directly linked to their burgeoning expansionist agenda,” according to the statement. — The Witness, Business Editor.