The Durban Business Confidence Index (DBCI)—compiled by the University of KwaZulu-Natal’s Macroeconomics Research Unit (with support linked to the Durban Chamber of Commerce and Industry and eThekwini Municipality)—dropped to 48.82 in the three months through June 2026, from 50.63 in Q1. That is a 3.57% quarter-on-quarter decline and 6.83% lower than the same period in 2025. A reading below 50 signals that businesses lack confidence in the local economy’s prospects. The report noted this was the first time the index had fallen below the neutral zone since Q2 2024.
Sector performance and drivers
Construction recorded the steepest fall: confidence dropped nearly 20% from the prior quarter and about 41% year-on-year. The report described worsening conditions with no clear short- to medium-term recovery signs. This aligns with broader South African construction weakness, including the national FNB/BER Building Confidence Index falling to 38 in Q2 2026 (from 42 in Q1), amid higher input costs, geopolitical uncertainty (notably Middle East tensions raising oil/fuel prices), softer activity, and profitability pressures—especially among subcontractors.
Other notable declines included:
- Manufacturing: down ~7% quarter-on-quarter (higher fuel prices raised production costs), though still up ~13.9% year-on-year.
- Agriculture, hunting, forestry and fishing: down ~10% (higher fertiliser prices and adverse weather).
- Community, social and personal services: down nearly 20% to 40.56.
- Transport: down ~4.2% to 56.08 (still above neutral but nearly 10% lower year-on-year), linked to fuel costs and geopolitical effects.
Some sectors provided offsets. Financial intermediation, insurance, real estate and business services surged ~41.6% to 55.55. Electricity, gas and water supply rose to 55.87. Wholesale/retail trade (including vehicle repairs, household goods, catering and accommodation) edged up slightly to 46.46.
Authors (Professor Harold Ngalawa and Dr Ntokozo Nzimande) attributed the overall drop largely to national and international factors rather than purely city-specific ones: higher fuel prices, escalating/volatile geopolitical tensions, immigration protests, and shifting expectations around inflation and interest rates. Durban’s decline was milder than the national picture—the RMB/BER Business Confidence Index fell 8 points to 39 in Q2 2026.
Broader context and municipal issues
Expectations were cautious: about 59% of respondents anticipated interest-rate increases in Q3 (the survey predated the South African Reserve Bank’s July decision to hold the policy rate at 7%). Inflation concerns remained widespread (65.8% expected price rises in Q3, down from 75.8% previously).
Municipal service delivery stayed a concern. Roads were the top-cited problem (31.5% of respondents), followed by environmental management (sewerage, waste, parks—27.4%), water supply (26%), and public safety (13.7%). Electricity was the least-cited issue (1.4%). The share of respondents who thought the municipality was unlikely to resolve a service-delivery complaint in a reasonable time improved modestly to 71.2% from 77.4%.
Longer-term backdrop
The DBCI had reached a high of 63.38 in Q4 2025 (its highest since inception), reflecting improvements tied in part to the Presidential eThekwini Working Group’s stabilisation efforts, better festive-season tourism, and some service-delivery gains. Earlier 2025 readings had hovered just above 50 amid service-delivery pressures and national economic headwinds. Construction has been a recurring weak spot in prior reports. National construction confidence also softened in Q2 2026 due to cost pressures and uncertainty.
This latest reading signals renewed caution in Durban’s business community after a period of relative improvement, with construction’s deep slump weighing heavily. While the city’s index remains above the national level, the drop below neutral highlights vulnerability to external cost and geopolitical shocks, ongoing infrastructure/service challenges, and the need for sustained local recovery measures to rebuild momentum. The next quarterly update will indicate whether these pressures ease or persist.
