Isaah Mhlanga, chief economist at RMB, said that the decline in business confidence during the second quarter is disappointing, particularly after the encouraging improvement recorded over the preceding two quarters.
South African business confidence fell sharply in the second quarter of 2026 as escalating geopolitical tensions in the Middle East, rising fuel prices and growing expectations of higher interest rates dampened sentiment across most sectors of the economy.
The latest RMB/Bureau for Economic Research (BER) Business Confidence Index, released on Tuesday, showed that confidence declined by eight index points to 39, reversing gains recorded over the previous two quarters and slipping below the long-term average of 40.
The survey, conducted between 14 and 25 May, captured a significant deterioration in the operating environment for businesses compared with the first quarter, as the fallout from the US-Iran conflict began to filter through to global and domestic markets.
According to the report, escalating tensions in the Middle East pushed oil and fuel prices higher, contributing to a dramatic shift in expectations for South Africa's monetary policy outlook.
