Low Consumer Confidence In SA’s Economy

Low Consumer Confidence In SA’s Economy

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Confidence in the outlook for the South African economy has plunged to its lowest level in 20 years, worse than during the height of the financial crisis in 2008. And South Africans say they expect the economy to deteriorate further over the next 12 months.

This emerged from the latest First National Bank/Bureau for Economic Research’s consumer confidence index on Monday, which remained in negative territory in the fourth quarter.

The overall index changed very little, from minus eight in the third quarter to minus seven in the fourth.

The consumer confidence index combined the results of three questions posed to South African adults. Consumers were surveyed on:

  • Their expectations of economic performance
  • Their expected financial position
  • How they rate the present time as being appropriate to buy durable goods such as furniture‚ appliances and electronic equipment.

Despite their depressed outlook, consumers are feeling slightly more optimistic about their finances, which could partly be attributed to recent wage increases, petrol price cuts in the past few months and some jobs created in the third quarter. These factors are likely to have improved household disposable incomes.

The household financial position index rose two index points to eight in the fourth quarter boosted by a rise in the optimism levels of low-income earners — who earn less than R7 000 a month.

 

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As expected, high-income consumers remained more optimistic about the outlook for their finances than low earners.

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