Consumer confidence in South Africa remains stubbornly optimistic, according to an survey released in Johannesburg on Wednesday.
”The current index s6core shows that consumers remains positive despite a considerable drop in confidence over the last six and twelve months,” said Eddie Grobler, senior vice-president and general manager for Africa at MasterCard Worldwide.
The company’s Worldwide Index of Consumer Confidence, conducted by a third-party research company, was designed to gauge consumer sentiment for the six months ahead.
The optimistic note was despite a significant decrease over the last six months. Out of a possible score of 100, South Africa’s index score decreased from 83,7 for the first half of 2008 to 74,3 in the latest survey result — one of the greatest declines in consumer confidence since the index was introduced in 2004.
The twice-yearly survey also showed a decrease in consumer confidence year-on-year, when compared to the index score of 80,7 for the second half of 2007.
Said Mike Schussler, chief economist at T-Sec: ”It is my opinion that the golden era of consumer confidence in South Africa is beginning to lose its shine.
”While it is important to note that the index is still positive at 74,3, the fact remains that the index dropped by 6,4 points year-on-year, and by 9,4 points in the last six months. This makes South Africa the third-least optimistic of the eight countries surveyed.”
The other markets surveyed include Egypt, India, Kuwait, Lebanon, Qatar, Saudi Arabia, and the UAE.
”South Africans are feeling a little uncertain about the future. High inflation figures are fuelling the higher interest rates that consumers are acutely aware of. They are also feeling the effects of lower property values, higher food and petrol prices, and they are expecting further electricity price and interest rate hikes,” he said.
The South African survey studied the three urban areas of Johannesburg, Cape Town and Durban and showed that Johannesburg, with a score of 75,9, was the most optimistic of the three cities.
Durban and Cape Town had index scores of 73,8 and 72,9, respectively. Durban consumers, previously the most optimistic of the three only six months ago, experienced the largest decline in confidence, dropping by 12 points from a high of 86,1.
Johannesburg reclaimed the title of ”most optimistic city” from Durban — mainly due to higher consumer confidence scores in the employment and regular income categories of the survey. – Sapa