South African business sentiment faces unexpected global volatility following start of military conflict in Iran

Business confidence hit 47 points in Q1 2026, but the US-Iran conflict has since triggered a rand slump and projected fuel price hikes of up to R3 per litre.

By: AXL Media

Published: Mar 4, 2026, 7:36 AM EST

Source: The information in this article was sourced from BusinessTech

Trends in domestic business confidence

The RMB/BER Business Confidence Index recorded a significant upward movement in the first quarter of 2026, rising three points to reach a level of 47. This figure represents the highest level of sentiment observed since 2015, excluding the immediate recovery period following the global pandemic. Analysts from the Bureau for Economic Research noted that the index currently sits six points above its long term average, suggesting that South African businesses were beginning to stabilize after years of economic stagnation. The survey was conducted in mid February, capturing a period of optimism fueled by political stability and expectations of growth.

Impact of Operation Epic Fury

The positive momentum identified in the quarterly survey has been tempered by the commencement of Operation Epic Fury on February 28. The military campaign, led by the United States against targets in Iran, resulted in the death of the country’s Supreme Leader and immediate volatility across international financial markets. While the survey respondents had expressed concern regarding geopolitical tensions, the actual transition into active warfare occurred after the data collection period, meaning the index does not fully reflect the current risk off sentiment pervading the market.

Currency and commodity market reactions

The financial fallout from the conflict has had an immediate effect on South African assets and global commodities. The rand, which had recently been trading at levels below R16.00 to the dollar, experienced a sharp decline to approximately R16.37. Conversely, safe haven assets have seen a surge in demand, with gold prices rising to $5,194 per ounce. Oil prices have also climbed, with Brent crude reaching roughly $82.17 a barrel, a development that poses a direct threat to the country’s inflation targets and consumer spending power.