THE Durban Business Confidence Index (BCI), computed from quarterly survey data on business conditions and expectations in the greater eThekwini Municipality, dipped for the third consecutive quarter in the second quarter of 2025.
Authors Prof Harold Ngalawa and Dr Ntokozo Nzimande from the Macroeconomics Research Unit at the University of Kwa-Zulu-Natal comment that, overall, the Durban BCI fell by 7% in 2025Q2. However, it remains above the 50-point mark, indicating that although business confidence has deteriorated, investors in Durban remain optimistic.
The index dropped by 7% to 52.40 points, down from 56.32 points in the previous quarter.
Ngalawa and Nzimande argue that the decline in sentiments about the City’s economic climate could be attributed to deteriorating national economic conditions, rather than factors specific to Durban. These factors include heightened geopolitical tensions, global trade uncertainty, and dynamics within the domestic political landscape (e.g., conflicts in the Government of National Unity (GNU)). This deterioration may have devastating implications for investment, growth, and unemployment in Durban, they add.
The authors say the reported index conceals significant sectoral differences across the economy. Four industries recorded improvements in the second quarter: wholesale and retail trade, construction, transport, storage and communication, and community, social, and personal services.
The manufacturing and agriculture sectors indicated marked declines in confidence, with agriculture showing a 42.5 point quarter-on-quarter decline from a high in 2025Q1 and manufacturing dropping by 19,3 points compared with the first quarter of 2025.
In the agriculture sector, Ngalawa and Nzimande explain that, following a strong improvement in 2025Q1, driven by favourable weather conditions, among other factors, in the second quarter confidence in the industry fell from 83.1 in the first quarter to 40.42 index points in the second quarter. This decline is mainly attributed to increased global uncertainties and animal diseases, which have adversely affected production and market stability in the animal husbandry sub-sector. Confidence in the agricultural sector, however, was 1% higher in 2025Q2 than in the corresponding quarter in 2024.
Manufacturing experienced a sharp decline in business confidence during the second quarter of 2025. The authors say confidence in this sector declined from 61.71 to 41.82 between the first and second quarters. Year-on-year, the manufacturing confidence index worsened by 18%, indicating that expectations for the sector are worse than they were in the same period in 2024. The ongoing global trade uncertainty, weak domestic and global demand, high operating costs, infrastructure constraints, and logistical inefficiencies continue to be the main causes of this deterioration, according to Ngalawa and Nzimande.
Service delivery
A second section of the research focuses on perceptions of service delivery, and the authors note that poor service delivery continues to be a concern for businesspeople in Durban.
The Survey of Business Opinion used to compute the Durban BCI for 2025Q2 reveals that 71.4% of the respondents (up from 70% in the previous quarter) reported that if they (or anyone) complained about poor service delivery, it is unlikely that the local municipality would deal with it within a reasonable time frame.
The Durban BCI is based on responses provided by business executives and entrepreneurs in the greater eThekwini Municipality. The index ranges from 0 to 100, where a score below 50 implies a lack of confidence in the Durban economy, a score of 50 indicates that the business situation is normal/neutral, and a score above 50 denotes confidence in the economy.
