Johannesburg - Consumer confidence increased from -1 index point to a level zero in the fourth quarter of this year, according to the FNB/BER Consumer Confidence Index (CCI) released on Thursday.
“Although the latest index number is still below the long-term average reading of the CCI (+5 since 1994), consumer confidence is now considerably higher compared to the very low CCI reading of -7 index points recorded during the 2013 festive season,” FNB property economist John Loos said in a statement.
“Consumers' rating of the outlook for the national economy and the appropriateness of the present time to buy durable goods improved slightly, while their rating of their household finances remained unchanged compared to the previous quarter.”
He said high income consumers remained more optimistic about their financial prospects compared to lower income households. However, the gap narrowed slightly during the fourth quarter.
The -7 point increase in the CCI compared to the same time last year was encouraging and pointed to an improved willingness among consumers to spend.
“Buoyed by a substantial drop in the petrol price, a moderation in food inflation, and a recovery in strike-affected incomes, consumers' ability to spend should continue to mend (albeit only gradually),” Loos said.
Because of the successful conclusion, and possibly also the final results, of the general elections in May, the CCI rebounded from the low levels of between -6 and -8 index points recorded during the third quarter of last year and first quarter of this year to a two-and-a-half-year high of +4 in the second quarter of this year.
However, the CCI slipped back to -1 index point in the third quarter of this year as economic realities exerted a downward pressure. - Sapa