Consumer confidence recovers lost ground
CONSUMER confidence recovered lost ground in the first quarter, returning to levels seen exactly a year ago before the Covid-19 pandemic in the first quarter of 2021, but remained in contractionary territory.
The FNB/BER Consumer Confidence Index (CCI), released yesterday, increased by another three points in the first quarter of this year, returning to -9 points.
This reading was much better than the collapse to a 35-year low of -33 points in the second quarter of last year at the onset of the pandemic and the lockdown restrictions.
FNB said the recovery to -9 points brought the CCI back in line with the reading recorded in March last year, just before South Africa entered its first strict nationwide lockdown. However, it said consumer confidence in general remained depressed, because the latest reading of -9 points was still well below the average CCI reading of +2 points since 1994.
FNB said the continued recovery in the CCI during the first quarter of this year could be ascribed to further increases in the economic outlook and household finances sub-indices of the CCI.
FNB chief economist Mamello Matikinca-Ngwenya said the sharp decline in Covid-19 infection rates and the extension of social grants had boosted confidence.
“A range of positive developments in all likelihood supported the sustained recovery in consumer confidence during the first quarter,” Matikinca-Ngwenya said.
“Notwithstanding some challenges and delays, the eventual commencement of the Covid-19 vaccine roll-out to thousands of healthcare workers may also have lifted the spirits of some South Africans.”
A breakdown of the CCI per household income group showed that middle-income confidence and lowincome confidence posted the largest gains in the first quarter of this year. The confidence level of high-income consumers edged up by only 1 point, and, at a level of -15 points, remained the lowest of all the income groups.
FNB said high-income households were still very concerned about the outlook for the economy and were considerably less optimistic about their financial prospects over the next 12 months.