Consumer confidence lifts, but remains in negative territory

SA’s first-quarter consumer confidence improved due to an uptick in the confidence levels of high-income households, suggesting retail sales volumes could gradually start to recover, according to a survey released on Monday.

The consumer confidence index, a measure of how optimistic or pessimistic consumers are about the future economic situation and their own financial prospects, improved to minus 15 points from minus 17 points in the fourth quarter of 2023 and minus 23 points in the first quarter of 2023, a survey by the Bureau for Economic Research (BER) in partnership with FNB showed. A breakdown of the index per household income group showed that high-income confidence, inclusive of those earning more than R20,000 a month, rose from minus 19 to minus 14 points during the quarter, according to the survey.

“Significantly lower levels of load-shedding and a deceleration in inflation — particularly on the food price front — likely supported consumer confidence during the first quarter,” FNB chief economist Mamello Matikinca-Ngwenya said.

“However, job losses in the fourth quarter and renewed fuel price hikes in February and March probably countered some of these positive developments, particularly for lowincome households. The tightening in fiscal policy announced in the February Budget Review probably also clipped consumer confidence.”

Consumers also remain wary about spending on bigticket items, suggesting durable goods sales will underperform during the first half of 2024, the survey added.