This quarter’s Merchantec CEO Confidence Index (MCCI) indicates that 55% of CEOs that were surveyed harbour doubts about the potential benefits of South Africa's association with the Brazil, Russia, India, China and South Africa (Brics) trade grouping.

The questionnaire aimed to gauge perceptions regarding whether Brics could offer South Africa opportunities for trade, investment and technology exchange that could contribute to the nation’s economic growth and development.

The results show that just over half of South African CEOs that were surveyed do not view Brics as a remedy for the country’s economic issues.

One of the prominent concerns voiced by CEOs is that Brics members are not substantial trading partners for South Africa when compared with other key partners like the UK and the US.

Some CEOs also expressed apprehension that closer ties with Brics might alienate these existing trade partners, possibly owing to perceived conflicts of interest.

Also, the current economic climate in South Africa has left many CEOs uninspired and lacking confidence, the index indicates.

Merchantec says that businesses are struggling with persistent power outages, logistical challenges, corruption, and high-interest rates, making it increasingly difficult to operate.

Despite these challenges, the MCCI recorded a 10% improvement in CEO confidence between the second and third quarter.

This increase in overall CEO confidence in South Africa is demonstrated by rising confidence in the following sectors: consumer goods, industrials, financials, information and communication technology, and consumer services, reaching 51.4 points in the third quarter.

Consumer services recorded the largest increase in confidence at 35% moving to a score of 55.42. This sentiment was attributed to a 34% increase in confidence relating to company growth expectations.

Consumer goods recorded an increase in confidence in the period, rising 16% from 45.88 to 53.24 points, moving above the neutral score line of 50 points.

The rise in sentiment was primarily driven by a 35% increase in confidence relating to economic conditions and an increase of 17% in company growth expectations.

Technology increased by 16% in confidence in the period.

Financials recorded a 15% increase in confidence. This sentiment was attributed to a 68% increase in confidence relating to economic conditions and an increase of 23% in company growth expectations. Industrials saw a 11% increase in confidence, moving to a score of 51.96.

The increase in overall confidence was primarily driven by increases in economic conditions and industry growth expectations.

Basic resources confidence dropped by 24% in the period after leading in the previous quarter.

The drop in confidence is attributed to a 64% decrease in confidence relating to economic conditions, a 22% decrease relating to the planned level of investment, a 14% decrease in confidence relating to company growth expectations, a 14% decrease relating to their ability to secure debt or equity capital, and a 9% decrease in confidence relating to industry growth expectations.

However, there was a notable confidence increase of 22% relating to planned level of investment.

Merchantec Capital is an independent equity and debt sponsor, mergers and acquisitions specialist, valuations expert and research and corporate governance advisory company.

The MCCI is a quarterly report which collates the views of CEOs of listed, large, private and multinational companies in South Africa since 2009.