The confidence of South African consumers has declined over 11% in the last 12 months, the latest MasterIndex survey released on Thursday showed.
Out of a possible 100 index points, the South African MasterIndex declined from a record high of 91,1 points for the second half of 2006, to 86,5 for the first half of 2007, to a low of 80,7 in the latest survey result.
The survey commissioned by MasterCard Worldwide found that despite the decline, consumer confidence in South Africa remains strong.
”The drop in consumer confidence can be largely attributed to the fact that when the survey was undertaken, South Africans had seen four interest rate hikes, petrol prices had recorded huge upward movements and there were signs that inflation was starting to rise substantially,” said Mike Schussler, chief economist at T-Sec.
Conducted every six months in selected markets in South Asia, the Middle East and Africa, the MasterIndex survey analyses consumers’ impressions of economic conditions for the next six months.
A score above 50 out of 100 indicates that consumers are optimistic about the overall economic environment, while a score below 50 signals pessimism.
The scores are based on respondents’ answers to questions about five key economic barometers: employment, economy, regular income, the stock market and quality of life.
The category that South Africans were most positive about was their regular income.
Asked if they expected their regular income to increase, remain the same or decrease, nearly 53% said they were expecting it to increase, with only 6,3% expecting it to decrease, resulting in a MasterIndex score of 89,3.
The largest declines in confidence were in the stock-market indicator (90,9 to 66,8) and the quality of life indicator (89,8 to 77,9). The only country that showed a greater decline than South Africa in the quality of life indicator was Lebanon.
”Consumer complaints in South Africa are starting to go beyond dinner table conversations and into the real economy, as rolling blackouts and increasing traffic congestion indicates to consumers that their quality of life may not be as good as they think,” Schussler said.
The employment and economy indicators were only slightly more negative than a year ago, down 4,1 and 3,5 points respectively, although the economy indicator did show an increase in comparison to the previous six month period, from 86,3 to 88,2.
”South Africans are maintaining a high level of consumer confidence despite bad news … they are however, certainly more aware that not everything is running like clockwork due to the increase in bad news over the last six months,” Schussler said. – Sapa