Even high-income consumer confidence has showed a marked decrease, indicating worry about the economic outlook and their household finances.
Consumer confidence has deteriorated dramatically as the economic outlook sours, signalling a marked slowdown in consumer spending in the coming months. Notable though is even high-income consumers' confidence is seeing a sharper decline than that of low-income South Africans since the end of 2021. After already slipping from -9 to -13 index points during the first quarter of 2022, the FNB/BER Consumer Confidence Index plunged to -25 in the second quarter of 2022.
The index measuring if it is a good time to buy durable goods, such as vehicles, furniture, household appliances and electronic goods, also decreased from -28 to -32, indicating that consumers consider the present as an inappropriate time to buy durable goods. Although consumer sentiment is now very depressed across all three income groups, affluent consumers are considerably more downbeat compared to low-income households, the BER points out.War, fuel prices, inflation and repo rate hammers consumer confidence
“However, a substantial improvement in job creation in recent months and Sassa’s commitment to resume the SRD grant payments at the end of June probably prevented an even more pronounced decline in low-income consumer confidence during the second quarter.” Matikinca-Ngwenya says positive developments, such as the scrapping of all remaining pandemic regulations, could result in a gradual recovery in job creation, while the back payment of missed SRD grants could counter some of the mounting inflationary and interest rate pressures.
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