By Anita Dangazele
- The FNB/BER Consumer Confidence Index improved to -13 in the third quarter, up from -19 in the previous quarter.
- The improvement was driven mainly by lower-income households, benefiting from slower food price rises, while wealthier consumers remain deeply pessimistic.
South Africans are feeling a bit better about money, according to new numbers released on Thursday. And this time, it’s people who earn less leading that improvement, not the wealthy.
Every three months, a survey asks about 2,500 people across the country how they feel about the economy, their own money situation, and whether now is a good time to buy things like furniture. All those answers get turned into one number, called the Consumer Confidence Index. That number just moved from -19 to -13.
Both of those numbers are still below zero, which means more people still feel worried than hopeful. But moving from -19 to -13 is a real improvement. To understand how big or small that is: this number has been as low as -36, during the hardest days of Covid lockdown, and as high as +26, when Cyril Ramaphosa first became president. So -13 isn’t great, but it’s a step in the right direction.
Here’s the part that stands out. Just three months ago, people earning more than R20,000 a month were feeling very negative, at -28. People earning between R5,000 and R20,000 were at -19. But people earning under R5,000 a month were actually feeling the least bad of everyone, at -12.
Now, this quarter’s improvement is coming mainly from that same group, people on lower incomes. Food prices have been rising more slowly lately, and that’s given them a bit of breathing room, something we’ve also seen in our own reporting on food prices each month. Wealthier households, on the other hand, are still feeling very negative, even though they’re the ones who usually spend the most money in the economy.
FNB’s chief economist, Mamello Matikinca-Ngwenya, says this doesn’t mean people are suddenly going to start spending freely.
“Shoppers will likely remain cost-conscious and prioritise necessities over discretionary spending in the run-up to the festive season,” she said, meaning people will keep buying what they need, not what they want, going into December.
What this means for you: if you’re planning your festive season budget, cheaper, no-frills shops are probably still your safest bet, not fancier stores. And it’s still a good idea to hold off on big purchases you don’t really need right now.
A war overseas, involving the US, Israel and Iran, is still pushing up fuel prices and creating uncertainty.
The Reserve Bank will make its own big decision on interest rates on 23 September, and that could change things again.
Pictured above:Low-income households are feeling more optimistic about the economy than high-income and middle-income earning households.
Image source: Pexels
