The Durban Business Confidence Index (DBCI) was officially launched on Thursday the 20th of October. Durban became the first South African City to launch a business confidence index, and one of few cities to do the same globally. The project was jointly developed by the Durban Chamber of Commerce and Industry NPC, eThekwini Municipality, and the University of KwaZulu-Natal. The Durban Business Confidence Index measures the sentiment of business leaders in conducting their day-to-day business. It is a leading indicator that reflects the current economic situation, future direction of commerce, monitors output growth and presents a warning of economic activity turning points. The Durban BCI was constructed using survey data collected from the business community in eThekwini Municipal region. The index varies between 0 and 100, where an index of zero reflects extreme lack of confidence while an index of 100 shows extreme confidence and 50 indicates neutrality.
The survey results revealed that Durban business leaders expressed pessimism ahead of the fourth quarter of 2022, recording a confidence level of 35.47 in the third quarter. This reflects a negative mood and sentiment by businesses. The lower business confidence in Durban relative to the national level may be partly due to lagged effects of the devastating floods in the previous quarter following heavy rainfall in KZN between 11 and 13 April 2022.
Durban is also yet to recover completely from the July 2021 looting. The recorded low confidence as per the Durban BCI is also driven by rising inflation and interest rates, supply chain bottlenecks, load shedding, labour costs, and uncertainty about the province's economic prospects.
This economic indicator will serve as a leading advocacy tool for the Durban Chamber of Commerce and Industry and the eThekwini Municipality. Through quarterly publications, users of the Durban BCI will be better positioned to monitor economic growth, foresee turning points in economic activity in Durban and inform policy decisions.
For more information on the DBCI or its methodology, contact Dr Nuthan Maharaj from eThekwini Municipality's Economic Development Unit on nuthan.maharaj@durban.gov.za or Prof. Harold Ngalawa from UKZN's Macro Economic Research Unit, on ngalawa@ukzn.ac.za.
