Confidence among South Africa’s consumers slipped in the second quarter as households took a dim view of their finances partly due to worries about their jobs, a survey showed on Monday.
The survey, sponsored by First National Bank (FNB) and the Bureau for Economic Research (BER), showed the consumer confidence index declined to 14 in the second quarter from 15 in the first quarter when it jumped from nine in the final three months of 2009 — its biggest rise in five years.
“Slightly fewer consumers expect an improvement in their own finances over the next 12 months compared to Q1 2010,” an FNB/BER statement said.
“Bleak employment prospects most likely undermined some consumers’ expectations about improvements in their own finances.”
The economy shed 171 000 jobs in the first quarter of 2010 despite a quicker pace of 4,6% in the recovery, having exited its first recession since 1992 in Q3 2009.
The central bank has reduced interest rates by 550 basis points since December 2008 to help stimulate growth but this has not helped consumer spending so far.
The FNB/BER survey showed sentiment towards buying durable goods at present was even more negative than in the first quarter.
“The hesitancy … reflects a relatively deep lingering uncertainty following the many global crises and shocks of recent years and a consequent ongoing willingness to reduce still very high outstanding debt levels,” FNB/BER said.
Household demand for credit has been weak and debt levels remain close to record highs.
FNB/BER said consumer spending is unlikely to rise significantly without a recovery in the labour market. – Reuters