German business confidence in SA doubles

Johannesburg - The confidence of major German companies in South Africa had almost doubled since 1998, the SA-German Chamber of Commerce and Industry said on Thursday.

Chamber researcher Gunter Pabst told reporters in Johannesburg that according to a recent survey, 86% of the companies were positive about South Africa's economic prospects, compared to only 48% in 1998.

"Was it not for the Zimbabwean bug, I think the results would even have been better," Pabst said.

Sixty-four percent of the respondents expressed strong, positive views on South Africa being able to maintain a market driven economy and 51% believed company taxation in South Africa was balanced.

However, the negative factors pointed to by the respondents in previous surveys seemed to have remained.

Seventy-nine percent had no confidence that violence and crime would decrease, 83% expressed concern over corruption, 67% expressed doubt about the country's labour regulations and 77% were negative about the competence of the civil service.

Eighty percent of the companies also expressed concern about the accountability of labour unions and 69% had no confidence in the productivity of the work force.

"The companies in South Africa become accustomed to these circumstances. Big companies are used to dealing with trade unions. But these factors could put off new investors," said the chamber's chief executive, Klaus Schuurman.

The respondents expressed significant confidence in the existence of some basic structures.

Seventy percent said South Africa had a cheap and reliable electricity supply, 56% were positive about free competition and 51% said there was a reasonable return of investment and free transfer of funds abroad.

Most companies said they would not consider leaving the country, disinvesting or relocating to another country in Southern Africa.

Fifty percent of the respondents had confidence in the new government (since the inauguration of President Thabo Mbeki), compared the 17% in 1998.

Seventy-eight percent said their confidence in the new government had not decreased, while 67% said the opposite in 1998.

Negative shifts identified by the researcher included concerns over the maintenance of transport infrastructure and incentives for investment.

The survey was conducted among 140 respondents in April and May this year. All the major German companies in South Africa, which also represent 80% of the workforce in German businesses, took part in the survey.

It was compared to similar polls conducted in December 1993, July 1994, May 1995, May 1997 and July 1998.

The best results were obtained in 1995, when 90% of the companies were positive about South Africa's economic climate.

"But that was a time when optimism was the order of the day," Pabst said.

Summing up the latest study, he said: "Don't look at each and every item. Know the figures have improved despite the political turmoil in Zimbabwe and despite the fact that the major negative points remain the same".


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