A downturn in the country’s economic mood was not hard to predict in the light of domestic events in recent months. It has gone from buoyant at the time of World Cup 2010, to gloomy in the current quarter.
The FNB/Bureau for Economic Research Consumer Confidence Index, peaking at 15 just over two years ago, is at -3. It was at -1 in the last quarter, has averaged 6 since 1994, and has sagged back to the caution of 2008 – at the time of the global slump.
Economists expected it in the light of the mine strikes and violence, and the transport strike against a backdrop of turbulent politics.
Then, after the survey between October 24 and November 9 of consumers’ readiness to buy durable goods, came the farm workers’ strike; and scenes of stupid, criminal destruction as Cape grape workers burned vineyards, the sources of their livelihoods. So the outlook for next year is just as subdued.
According to this index, then, it is going to be a frugal Christmas with consumers holding back on buying furniture, appliances and electronics. This, in turn, will impact on the country’s gross domestic product.
The dim expectations are probably unseen by those causing the uncertainty. When fighting for money, though – and in many cases just a living wage – GDP, international credit ratings, exchange rates, consumer confidence, business confidence and other factors crucial to South Africa’s well-being, probably seem distant.
If they are understood, then the question is whether they really care that their actions have much larger, harmful consequences like this. For many, it is about being on the breadline, and their myopia is explicable.
However, there can be no understanding of violence as a supplementary means of leverage or protest. Consumer confidence may have been better than -3 had the recent industrial trouble happened without injury or damage.