Different way of viewing 20-year low in business confidence.  

Yesterday’s RMB/BER Business Confidence Index told us eight out of every ten respondents to this prestigious survey are “unsatisfied with prevailing business conditions.” The index dropped sharply from the second quarter’s 28 to just 21, its lowest level in 20 years.

The survey, conducted by Stellenbosch University’s BER for almost 50 years, has only scored worse in the immediate aftermath of the 1976 Soweto Riots; the 1985 Debt Standstill; during pre-democracy turbulence of 1992; and in following 1998/99 Emerging Market crisis. The economy recovered strongly after those troughs, as did business confidence.

This time around it’s not a political or external event which is putting business people into such foul moods. They are now seemingly in shock at the scale of wreckage wrought by Zumanomics. That’s good. Because eventually it will also dawn on them that those who trashed the place have been ejected. And that the cleanup is already well underway.

It’s always darkest before any dawn. History shows us that in the past half century the best time to have invested into South Africa was during one of those four confidence troughs when bargains were everywhere. The smart money knows the time to buy is when everyone else is selling, because those who reflect realise that this too shall pass.