Picture: 123RF/ GUI YONGNIAN
Picture: 123RF/ GUI YONGNIAN

The majority of consumers expect SA's economic prospects to deteriorate over the next year, with consumer confidence remaining stuck at a level last seen during the final days of Jacob Zuma's presidency.

The consumer confidence index (CCI), compiled by FNB and the Bureau for Economic Research at Stellenbosch University, was unchanged at -7 index points in the fourth quarter of 2019 from the previous quarter. That is a two-year low.

The index looks at consumer attitudes and expectations and is used to evaluate economic trends and prospects. It asks respondents about the expected performance of the economy, the expected financial position of households, and the rating of the appropriateness of the present time to buy durable goods, such as furniture, appliances and electronic equipment.

The survey's economic outlook index improved slightly, from -17 points to -14 points, while the subindex covering the suitability of purchasing durable goods declined to -18 points, from -15 in the third quarter.

The subindex regarding household financial outlook fell to 11 points, from 12 previously.

“Consumer sentiment remains depressed on the back of weak economic growth, record-high unemployment and Eskom's ongoing electricity supply crisis and financial woes,” said FNB senior economist Siphamandla Mkhwanazi.

“Furthermore, the 2019 medium-term budget policy statement delivered by finance minister Tito Mboweni at the end of October highlighted a stark further deterioration in government finances, raising concerns about possible cutbacks in government employment, additional tax hikes for consumers and Moody's lowering SA's only remaining investment grade sovereign credit rating to junk status in 2020,” Mkhwanazi said.