Johannesburg - A slight drop of only one index point to 38 in the Rand Merchant Bank/Bureau for Economic Research Business Confidence Index (BCI) was surprising, RMB said on Wednesday.
It said this should keep the country on track for economic growth of 3%.
"Against the backdrop of tremendous volatility in financial markets, troubling developments in the global economy, especially in Europe, and political uncertainties domestically, it is surprising business confidence barely changed in the fourth quarter," RMB said.
After falling from 55 index points in the first quarter of the year to 39 in the third quarter, its BCI dropped one point to 38 in the fourth quarter.
"Sentiment improved notably in the retail and wholesale trade sectors, deteriorated further in new motor trade and remained largely unchanged in manufacturing and building," RMB said.
Following a sharp drop in the first half of the year, retail confidence recovered strongly, with the fourth quarter in particular showing a marked increase, jumping by eight points to 56.
Sentiment improved noticeably for retailers of non-durable and durable goods while it deteriorated slightly, off a high base, for retailers of semi-durable goods.
Sales volumes and order books increased in most cases, as did selling prices.
Wholesale confidence rose from 31 index points in the third quarter to 38 in the fourth quarter.
Mood perked upSimilar to most retailers, the mood of wholesalers selling consumer goods perked up as sales volumes as well as prices rose.
However, there was a further decline in confidence of new vehicle dealers.
From a high of 84 index points in the first quarter, it fell to 58 in the third quarter and 44 in the fourth quarter.
Volume growth was "decent" but it could be that a growing share of new vehicle sales represented cheaper models with thinner margins, RMB suggested.
In both the manufacturing and building sectors, confidence fell by one point to 35 and 19 respectively.
Confidence levels of building contractors were largely consistent, with slowly improving but still subdued real activity in residential and non-residential markets.
RMB said flat confidence in the manufacturing sector hid much improved underlying business conditions.
"A number of factors might explain this disconnect," it said.
It could be that the fourth-quarter resurgence in production volumes merely reflected the catch-up from weak strike-affected levels the quarter before.
Having experienced difficult times for so long, respondents might also not trust the rebound, while some might feel it was only a matter of time before growing troubles in advanced economies hit demand.
"For the year as a whole, the economy still looks good for growth of around 3% - the same figure we more or less expect for 2012," RMB said.
The index is based on the number of respondents surveyed in the above industries who rate conditions in their field "satisfactory".
The SA Chamber of Commerce and Industry also prepares a BCI. Released on November 3, it showed a decline of 0.9 points.