South Africa Services Sentiment Drop Shows More Second-Quarter Pain

LAGOS (Capital Markets in Africa) — Sentiment in South Africa’s services sector fell to a record low in the second quarter, providing further evidence that the economy probably suffered a historic decline in that period.

A quarterly index measuring confidence in the sector fell to 7 from 17 in the three months through March, the Bureau for Economic Research said in an emailed statement Tuesday. That’s the lowest reading in the 15-year history of the survey.

Restrictions aimed at curbing the spread of the coronavirus pandemic started on March 27 and shuttered almost all economic activity. The results of the survey, publicly released for the first time this month, showed activity in restaurants, hotels and real estate came to standstill, while transport and business services registered unprecedented declines, the BER said.

The survey adds to the bad news from the second quarter after the BER’s business confidence index dropped to a record and consumer sentiment fell to the lowest since 1985, the year the former government declared a partial state of emergency amid growing opposition to its apartheid policies.

Africa’s most-industrialized economy had already been in recession for three quarters by the time lockdown regulations kicked in and central bank forecasts show GDP probably dropped an annualized 32.6% for the three months through June. On top of that, the economy entered the 80th month of a downward cycle in July.

Source: Bloomberg Business News