BUSINESS confidence in the small-business sector remained in negative territory in the fourth quarter of last year as owners battled rising operational costs, labour disruptions and cash-flow problems.

In the fourth quarter confidence improved marginally to 48.1 from 46.6 in the third quarter, but was below the 50 mark, according to Nedbank small-business index fourth quarter survey results released on Monday.

Government policies emphasise the need for a thriving small and medium-sized enterprise sector to create jobs and spark growth. The National Development Plan envisages about 90% of jobs would be created in small companies by 2030.

But small-business owners were pessimistic when surveyed on their financial situation, the health of their cash flow, operational costs and support from the government.

Finance Minister Pravin Gordhan said at an ANC briefing on its election manifesto last week that more needed to be done for small business. “Many studies show that the small-business sector in South Africa is actually very small compared with other countries, we have to grow it.”

Yet the survey showed the state was not an enabler of small business, with the government’s level of support falling from 2.5 out of 10 in the third quarter to 2.2 in the fourth. In contrast, private sector support for small businesses rose in the last quarter to 5.2 out of 10 from 4.9 in the previous quarter.

“The areas in which small businesses would like to see improvement include the reduction of red tape (and) the amendment of black economic empowerment regulations and policies,” said Dennis Dykes, Nedbank chief economist.

Further, small business would like to see the state making a bigger contribution to the general improvement of the economy and better service delivery.

Mr Dykes said businesses exhibited consistent pessimism in the four quarters of last year. This he partly attributed to the difficult economic environment.