Improved Electricity Reliability Outshines Seasonal Sales for South African SMEs
By Thandiwe Moyo, Senior Analyst – Small Business Research, Business Partners
The latest SME Confidence Index, released by Business Partners for the fourth quarter of 2025, reveals a clear pattern: steady electricity supply is a stronger catalyst for small‑business recovery than the traditional boost from Black Friday and Christmas trading.
What the Index Shows
The quarterly sentiment survey captures the outlook of South African small and medium‑sized enterprises across demand, finance, labour and overall economic confidence. For Q4 2025 the index highlights three headline figures:
- 73.4 % of surveyed SMEs said that a period of improved electricity stability — following the extended suspension of load‑shedding — had positively affected their operations.
- 46.5 % reported that seasonal trading (Black Friday, holiday sales) had no significant impact on performance.
- 8.1 % actually experienced a negative effect from the holiday period.
These numbers contrast with retail‑sector data from Statistics South Africa, which recorded R117.9 billion in retail sales for November 2025, a 3.6 % year‑on‑year increase.
Why Power Stability Beats Seasonal Demand
Jeremy Lang, Managing Director of Business Partners, notes that while holiday spikes can lift turnover for some retailers, the benefit is uneven and often short‑lived. “Seasonal demand alone is not a guaranteed driver of significant performance and financial gains for SMEs, especially when consumer spending is constrained and operating costs are rising,” Lang explained.
In contrast, reliable electricity delivers more consistent operational relief:
- Predictable opening hours reduce the need for costly diesel generators or uninterruptible power supplies.
- Fewer interruptions lower waste and rework, boosting productivity.
- Steady power enables better planning for inventory, staffing and cash flow.
Lang added, “The significant reduction in load shedding in 2025 enabled more predictable operating hours, reduced reliance on costly backup power and supported improved productivity.”
Broader Confidence Indicators
The Q4 2025 index also tracks several confidence metrics that showed modest improvement:
- Expectation of business growth in 2026 rose to 81 % (up from 79 % in Q3 2025, though still below the 84 % recorded in Q4 2024).
- Confidence that the South African economy will support business growth increased to 69 % (up from 64 % the previous quarter, unchanged year‑on‑year).
- Access to finance confidence climbed to 65 %.
- Confidence in finding suitably qualified staff reached 73 %.
- Expectation that customers will pay on time improved by five points to 73 %.
Despite these gains, SMEs continue to grapple with persistent headwinds: cash‑flow pressures, broader economic conditions, crime and low confidence in government support (steady at 47 %).
Looking Ahead
The data paint a mixed picture. Seasonal trading has not delivered the broad‑based uplift many entrepreneurs hoped for, yet the stabilisation of the power grid is laying a foundation for more sustainable growth. As Lang concludes, “SMEs are still under pressure, particularly as seasonal trading has not provided the boost many had hoped. However, there are clear signs that greater stability in electricity supplies is helping to generate renewed optimism and lay the foundation for more sustainable growth.”
For policymakers and financiers, the takeaway is clear: investments that enhance electricity reliability may yield higher returns for the SME sector than short‑term promotional campaigns alone.
