Slight uptake in consumer confidence

The latest Nielsen South African Consumer Confidence Index (CCI) for Q3, 2017 reflects a five-point increase from the previous quarter to 83 points, the highest level since Q3, 2016.

According to Nielsen South Africa MD Bryan Sun, “South Africa is slowly turning around from recent economic declines to low levels of growth.

“As inflation is contained, grocery prices have stabilised, with additional relief in many food commodities due to the end of the drought in certain regions.

“However, there is declining sentiment regarding job prospects and intentions to buy, so a full recovery is still a distant dream.

“In addition, a more cautionary consumer mindset has led to more risk-averse spending behaviour and a heightened focus on saving, especially in the areas of out-of-home eating, entertainment and fashion, followed by an acute awareness of price for consumer-packaged goods.

“To counter this, businesses have been drawn into more promotional activities, eroding brand equity and margins.”

With continued pressure on consumers’ disposable income, Nielsen’s CCI Q3, 2017 results reflect the persistent anxieties of SA households.

Nagging uncertainty and fears for the future seem set to continue, reflected in 76% of survey respondents foreseeing poor job prospects for South Africans over the next 12 months.

There has, however, been a steady increase in the number of respondents who think job prospects will improve, since Q4, 2016.

Looking ahead at the state of their personal finances over the next 12 months, 59% of South Africans have a positive outlook, which shows a steady increase from the 50% recorded in the fourth quarter of 2016.

In terms of whether now is a good time to buy the things they want and need, 71% said it is not a good time, but this is a drop from the 75% recorded in Q4, 2016, which indicates a slight upswing in consumer sentiment towards both planned and impulse purchases.

Heightened economic perceptions come with a personal obligation towards better managing squeezed household budgets.

In light of this, the latest CCI results reflect a strong responsibility for future financial planning, revealed by the highest number of South Africans (37%) saying they will use their spare cash to put into savings.