The FNB/BER Consumer Confidence Index (CCI) recovered some lost ground to the third quarter of 2021, data showed on Monday, pointing to a level of resilience among consumers and consumer spending.
The index came in at -10 index points, having slipped from -9 to -13 index points during the second quarter of 2021.
This was despite violent protests and rampant looting that tore through KwaZulu-Natal and Gauteng during July points to a level of resilience among consumers, and by extension consumer spending, during the third quarter of 2021, the report said.
“While the latest CCI reading of -10 remains well below the average CCI reading (of +2 since 1994) and, therefore, denotes depressed consumer confidence levels, it is nevertheless quite close to the reading of -9 recorded just prior to the onset of the Covid-19 epidemic in South Africa (in the first quarter of 2020),” it said.
The increase in the CCI during the third quarter of 2021 could be ascribed to upticks in the household financial position and time-tobuy durable goods sub-indices of the CCI.
FNB Senior Economist Siphamandla Mkhwanazi said that “the reinstatement of the R350 per month Social Relief of Distress grant between August 2021 and March 2022 would have been a major relief to millions of low-income households. Given soaring food and fuel prices and the fact that South Africa’s unemployment rate climbed to a record high during the second quarter, the expiration of these grants at the end of April left gaping holes in the budgets of low-income households.”
Mkhwanazi also said that “the public sector wage agreement that was reached at the end of July in all likelihood bolstered the confidence levels of the more than a million civil servants in South Africa, most of whom fell in the high-income category”.
Casey Delport, an investment analyst at Anchor Capital, said while the resilient nature of the average SA consumer appeared to be holding, much of this said resilience appeared to be tied to government support, as well as retrenchment packages and life insurance payouts.
BUSINESS REPORT ONLINE