Johannesburg – Data from the FNB/BER Consumer Confidence Index (CCI) has laid bare the challenges faced by consumers in South Africa.
The FNB/BER CCI decreased to -13 in the second quarter of 2021.
“The latest reading remains well below the average CCI reading (of +2 since 1994) and denotes very depressed consumer confidence levels, albeit less negative compared to the extraordinarily pessimistic readings of -33 and -23 recorded during the second and third quarters of 2020 (when severe pandemic-induced economic restrictions were implemented),’ the bank said in a statement.
“A breakdown of the CCI per household income group shows an alarming turnabout in consumer sentiment among low-income households, with the CCI for the least affluent consumer group crashing from a neutral level in the first quarter to deep into negative territory during the second quarter.”
The bank further said the decline in the overall CCI can largely be attributed to a major deterioration in the confidence levels of low-income households (earning less than R 2 500 per month).
The confidence level of high-income households (earning more than R20 000 per month) slipped from -15 to -18 during the second quarter, while that of middle-income earners (i.e. households with a monthly income of between R2 500 and R20 000) edged down from -7 to -9 index points.
FNB Chief Economist Mamello Matikinca-Ngwenya said a string of negative developments in all likelihood knocked the confidence levels of less affluent consumers, including soaring food and fuel prices, the onset of a third wave of Covid-19 infections in SA and the feeble recovery in low-skilled employment following unprecedented job losses last year.
“However, the expiration of the substantial social grant top-ups implemented in 2020, as well as the Social Relief of Distress (SRD) grant and the TERS programme, arguably dealt the largest blow to the spending power and confidence levels of low-income consumers,” she said.
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