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Pessimistic business outlook in Gauteng

Johannesburg - Concerns relating to the lack of availability of a skilled workforce, poor government service delivery, crime and political instability continue to affect businesses in Gauteng and throughout South Africa too.

These issues are directly impacting business growth and expansion in Gauteng and the business sector laments about them time and again, according to the latest Grant Thornton International Business Report (IBR).

The IBR data relating specifically to Gauteng was released on Wednesday.

The research for the third quarter of 2013 to September reveals that business executives in Gauteng and the Western Cape are the most pessimistic about business prospects in the next 12 months.

For the third quarter of 2013 to September, South Africa as a whole is only 39% optimistic about growth in the coming year according to the IBR.

Gauteng scored 31%, which translates into 69% of a pessimistic business sentiment for the province.

The most optimistic region in terms of growth prospects is KwaZulu-Natal, recording optimism for growth prospects of 53%, followed by the Eastern Cape (41%).

This negative outlook has been steadily declining since the third quarter of 2011, when Gauteng businesses were 63% optimistic.

During the third quarter of 2012, the business sector in Gauteng businessmen was 54% optimistic about future growth prospects.

“The low sentiment amongst South African business owners could possibly be ascribed to the flight of foreign funds following initial indications from the US Federal Reserve earlier this year that it would start tapering its economic stimulus programme,” said Andrew Hannington, CEO of Grant Thornton Johannesburg.

“This announcement was contingent on its economy showing sufficient recovery, which has not yet been fully realised, but the signal prompted fund managers to withdraw capital from emerging markets that had been offering higher returns in the recent past.”

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