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According to business confidence survey: Medium and small businesses don't trust the economic future

by , 16 April 2015
Trust in the economic future continues to stay at a moderate level when we talk about local small and medium entreprises (SME). The owners manifest an apprehensive perception when it comes to regulatory and economic challenges facing the sector and country as a whole.

The apprehensive perception is showed by the fourth quarter 2014 Business Partners Limited SME Index (BPLSI), which measures attitudes and confidence levels among local SME owners, reveals Bizmag.co.za.

According to the same study, SMEs conveyed an average confidence level of 53% that the South African economy will be conducive for business growth in 2015 – a 2% quarter-on-quarter (q/q) and year-on-year (y/y) decrease.

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As Ben Bierman, the CFO of Business Partners Limited, explained, the confidence encounters such a low level due to the slow economic growth, rand volatility and load shedding.

Moreoever, SMEs owners are facing a harsh environment. Studies show that business confidence is also influenced by factors like corruption within Government and political instability.

As Bizmag.co.za noted, the latest BPLSI revealed a 2% q/q and 1% y/y increase in SMEs average confidence levels (40%) that the current labour laws are conductive to the growth of SA businesses.

According to the same source, respondents in the BPLSI listed regulatory requirements as not favouring SMEs and that more should be done to review these to aid business well-being and growth.

'Government should seek to implement less onerous labour laws for SMEs with a turnover of less than R2 million per month or exempt SMEs from complying with the full ambit of current labour laws. For example, small business could be excluded from current collective bargaining outcomes which are usually controlled by big business. SMEs are not represented at the bargaining table, but are then compelled to pay a minimum wage which they often can't afford.', noted the previously mentioned source.

Bierman explained that they must expect changes in this area since small business was identified as one of Government's nine strategic priorities to be pursued this year.

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