Despite positive macroeconomic signals and strong optimism around the G20 summit, South African SMEs reported a widespread decline in confidence in the third quarter of 2025.
This is according to the latest SME Confidence Index from Business Partners Limited, which shows weaker sentiment across almost all performance indicators compared to Q2 2025 and Q3 2024.
During the quarter, South Africa recorded 0.5% GDP growth, inflation expectations remained at a record low, and interest rates reached their lowest level since 2022. However, these improvements did not translate into stronger business sentiment.
Confidence among SMEs that their business will grow over the next 12 months fell to 79%, down two percentage points quarter-on-quarter and year-on-year. Confidence that the South African economy will be conducive to business growth fell to 64%, down 2 percentage points and 4 percentage points compared to the second quarter of 2024.
Access to finance recorded the sharpest decline, falling to 61%, six percentage points lower than the previous quarter and two points lower year-on-year. Confidence in labor laws conducive to growth dropped to 58%, while confidence in finding suitable skilled workers fell to 69%. Confidence in private sector support weakened to 54%.
The only indicator of improvement was confidence that the government is doing enough to promote SME growth, which reached 49%, an increase of one percentage point quarter-on-quarter and year-on-year, although still below the neutral 50% threshold.
The most significant decline was in the expectation that customers would make payments within the stipulated time frame. At 68%, this measure declined by four percentage points quarter-over-quarter and year-over-year. SMEs identified cash flow constraints and macroeconomic conditions as the most serious challenges over the next six months, with delinquency ranking third.
83% of SME owners surveyed said the outcome of the G20 summit is expected to have a positive impact on SME growth and the broader economy. When asked which outcomes would most benefit their businesses, 30.3% cited stronger international trade and market access, 30.1% pointed to improvements in SME financing and support, and 28.1% highlighted increased global investment confidence in South Africa.
However, the overall decline in confidence indicates a gap between the long-term opportunity and immediate trading conditions.
On key indicators, access to SME-specific information and support increased to 85%. The importance of social media as a marketing tool increased to 88%, while mentorship increased to 84%. The importance of access to finance declined three percentage points quarter-on-quarter to 82%.
The Q3 2025 index points to a stable macroeconomic backdrop, but caution continues among SMEs, with near-term growth prospects closely linked to cash flow stability, demand and payment certainty.
All rights reserved. © 2026. Bizcommunity.com Syndicate Media Inc. Provided by (Syndigate.info).