Consumers more cheerful in the third quarter

South African consumers cheered up a bit in the third quarter, but remained pessimistic, a poll released on Thursday showed.

The third-quarter consumer confidence index came in at -3 points, a rebound from -11 points
in the second quarter, the survey done by Stellenbosch University’s Bureau for Economic Research sponsored by First National Bank found.

The rise in consumer confidence during the third quarter could be attributed to households having more purchasing power in August thanks to a 9% drop in petrol prices and the rand strengthening to under R13.50/$, First National Bank senior economic analyst Jason Muscat said.

Another factor was August’s local elections where the DA gained control of Nelson Mandela Bay, Tshwane and Johannesburg.
A breakdown of the survey results per province shows soaring consumer confidence levels in the Eastern Cape from zero to 29 index points, with confidence levels in Gauteng also rebounding strongly from -6 to 5.

Confidence levels in SA’s other two large provinces, KwaZulu-Natal and the Western Cape, also increased — but to a lesser extent, and remain deep in negative territory, with a reading of -18 in the Western Cape and -10 in KwaZulu-Natal.
The survey found a marked increase in the two forward looking subindices of the consumer confidence index, namely the expected performance of the South African economy in 12 months’ time and the financial prospects of households in 12 months’ time.
The economic outlook index jumped by 13 index points to -4, while the expected financial position index increased by 12 index points to 16.

In sharp contrast, the present time indicator that considers whether it is currently a good time to buy durable goods slumped from -19 in the second quarter to -21 in the third.
This component of the survey found poorer households became more optimistic while richer households became more pessimistic regarding big purchases like cars and furniture.
The time to buy durable goods subindex for high-income consumers plunged from -13 to -24, while that for the low-income group improved from -25 to -15 in the third quarter.