Consumer confidence in SA plunges to lowest level in 30 years

Consumer confidence took a huge knock in the second quarter of 2022.

The First National Bank/Bureau of Economic Research (FNB/BER) Consumer Confidence Index (CCI) plunged to -25 in Q2.

It was at -13 in the first quarter of the year.

“Bar the CCI reading of -33 in the second quarter of 2020, the current reading is the lowest in three decades” says the BER.

As a result we can expect a marked slowdown in consumer spending in coming months, it adds.

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Motheo Khoaripe interviews Mamello Matikinca-Ngwenya, Chief Economist at First National Bank (FNB) South Africa.

She says the Index helps to get an understanding of how consumers feel about the future.

… so they may be worried about things like job security, whether they’re going to see pay increases… essentially what frame of mind they find themselves in and ultimately how they then allocate the income that they have at their disposal.

Mamello Matikinca-Ngwenya, Chief Economist – FNB SA

The Index is the lowest in three decades if you strip out the plunge that we saw in the second quarter of 2020 – that was around the Level 5 lockdown and at the height of the COVID pandemic.

Mamello Matikinca-Ngwenya, Chief Economist – FNB SA

She explains the main sub-indices that make up the overall number.

Firstly it is how consumers see the economic outlook over the next 12 months and then how they view their household financial outlook over that period.

The third is whether consumers think now would be the right time to buy big items like furniture and cars.

What we’re seeing from the data is that consumers are feeling quite pessimistic about the economic outlook… It’s across the different income bands and it’s not surprising in the context of where we’re seeing inflation, interest rates and the uncertainty around the geopolitics.

Mamello Matikinca-Ngwenya, Chief Economist – FNB SA

For more detail, listen to the interview below:

This article first appeared on CapeTalk : Consumer confidence in SA plunges to lowest level in 30 years