Consumer confidence improves, but remains in negative territory

SA’s first-quarter consumer confidence improved due to an uptick in the confidence levels of high-income households, suggesting retail sales volumes could gradually start to recover, according to a survey released on Monday.

The consumer confidence index, a measure of how optimistic or pessimistic consumers are about the future economic situation and their own financial prospects, improved to -15 points from -17 points in the fourth quarter of 2023 and -23 points in the first quarter of 2023, a survey by the Bureau for Economic Research (BER) in partnership with FNB showed.

A breakdown of the index per household income group showed that high-income confidence, inclusive of those earning more than R20,000 a month, rose from -19 to -14 points during the quarter, according to the survey.

“Significantly lower levels of load-shedding and a deceleration in inflation — particularly on the food price front — likely supported consumer confidence during the first quarter,” FNB chief economist Mamello Matikinca-Ngwenya said.

“However, job losses in the fourth quarter and renewed fuel price hikes in February and March probably countered some of these positive developments, particularly for low-income households. The tightening in fiscal policy announced in the February Budget Review probably also clipped consumer confidence.”

Consumers also remain wary about splurging on big-ticket items, suggesting that durable goods sales will underperform relative to the other consumption categories during the first half of 2024, the survey added.

Reuters