Consumer confidence up in second quarter
Consumer confidence rose to +11 points in the second quarter of 2011, from +9 points in the preceding quarter, according to the most recent data from First National Bank (FNB) and the Bureau for Economic Research. This was not all that different from the +14 level that prevailed throughout 2010.
“This relatively high reading continues to underpin consumption intentions, provided income growth and credit access is there to sustain it. So far into this two-year recovery it has,” said FNB chief economist Cees Bruggemans.
He said that while not every South African consumer felt or acted the same way, impressive urban majorities, even with sometimes heavily skewed contributions, continued to express comfortable, solid confidence.
Black consumers, especially Sotho and Nguni speakers, expressed overwhelming confidence.
These urban groupings showed average majorities of +18, suggesting 60/40 splits in favour of confidence, which was high by historic standards and more reminiscent of the late stages of expansionary upswings rather than early phases, as is the case.
Most minorities were more coy, but mostly still helpful in sustaining the overall confidence, especially when asked about their own financial prospects.
White consumers showed only a small confident majority of +2, with English-speakers of all kinds (-1) and Afrikaans-speakers of all kinds (-2) not registering very different readings.
Bruggemans said successful black urbanites were favoured by financial and economic trends. They retained high confidence in government—going by election results—and sizeable majorities believed the economy had good prospects.
“White consumers clearly have far less trust in the economy’s prospects, possibly also reflecting their political views,” he said.
Yet, along with coloured and Indian consumers, they showed comfortable majorities of confidence closely mirroring consumer spending trends.
“This is further borne out by the income categories, with all groupings retaining remarkable confident majorities, varying from +8 for low incomes - less than R2 000 monthly - +10 for middle incomes—R2 000 to R10 000 monthly, and +16 for high incomes of over R10 000 monthly.—I-Net Bridge