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SA consumer confidence plunges

To worst level in more than three decades, barring the initial Covid-19 hard lockdown period in the second quarter of 2020.
The 'dramatic deterioration in consumer sentiment now signals a marked slowdown in consumer spending in coming months' warns the latest CCI report.Image: Moneyweb

Consumer confidence levels in South Africa have plunged to -25 in the second quarter of 2022 as the local and global economic outlook sours in the wake of spiking inflation and the fallout from the Russia-Ukraine conflict.

The latest FNB/BER Consumer Confidence Index (CCI) reading, published on Wednesday, is the worst in more than three decades, barring the initial Covid-19 hard lockdown period in the second quarter of 2020.

Read: Rising food prices hit poor people the hardest

“Having already slipped from -9 to -13 index points during the first quarter of 2022, the FNB/BER CCI plunged to -25 in the second quarter of 2022. Bar the CCI reading of -33 in the second quarter of 2020 – when the sudden outbreak of the Covid pandemic and subsequent implementation of level 5 lockdown pummelled sentiment – the current reading is the lowest in more than 3 decades,” FNB notes in a statement.

FNB/BER, Consumer Confidence Index, Household spending

Source: FNB/BER

“Whereas official data shows that the growth in real consumer spending remained robust [3.2% year-on-year] during the first quarter of 2022, the dramatic deterioration in consumer sentiment now signals a marked slowdown in consumer spending in coming months,” it warns.

“The remarkable collapse of the CCI during the second quarter of 2022 can be ascribed to a major deterioration in the economic outlook sub-index of the CCI [from -18 to -39] and a complete turnabout in the household financial prospects sub-index [from +8 to -5].”

“The index measuring the appropriateness of the present time to buy durable goods [for example vehicles, furniture, household appliances and electronic goods] also edged down [from -28 to -32], indicating that consumers consider the present as an inappropriate time to purchase durable goods,” the latest CCI report adds.

20Q1 20Q2 20Q3 20Q4 21Q1 21Q2 21Q3 21Q4 22Q1 22Q2
Overall FNB/BER CCI -9 -33 -23 -12 -9 -13 -10 -9 -13 -25
Economic outlook -16 -21 -23 -12 -5 -14 -14 -12 -18 -39
Household financial outlook 14 -13 -2 6 10 10 12 14 8 -5
Suitability of the present time to buy durable goods -26 -64 -44 -30 -32 -36 -29 -30 -28 -32

Source: FNB/BER

Meanwhile, a more detailed breakdown of the CCI for Q2 2022 shows that, while consumer confidence fell notably across all income groups, high-income confidence has soured more than low-income confidence.

“Having already slumped from -11 to -18 index points in the first quarter, the confidence level of high-income households [earning more than R20 000 per month] crashed to -30 in the second quarter.”

“This reading is only 3 index points north of the historic low of -33 recorded for this sub-index in the second quarter of 2020, with the vast majority of affluent households now anticipating a deterioration in their household finances and, in particular, in South Africa’s economic growth rate,” the report highlights.

Depressed consumers all-round 

“Although consumer sentiment is now very depressed across all three income groups, affluent consumers are considerably more downbeat compared to low-income households,” it adds.

“In January, the consumer price inflation rate breached the 6% upper range of the South African Reserve Bank’s target for the first time in 5 years and the prime interest rate has been hiked by 75 basis points since the start of the year,” it says.

Read: Price shock may spur biggest SA rate hike since 2002

“Whereas spiralling food and fuel prices are probably of primary concern to less affluent households, the prospects of further steep interest rate hikes and sinking share prices on the JSE would have compounded the inflationary pressures when it comes to middle- and high-income households,” it notes.

According to FNB chief economist Mamello Matikinca-Ngwenya, the non-payment of the R350-per-month Social Relief of Distress (SRD) grant to 10.6 million South Africans in April and May in all likelihood also weighed on the confidence levels of many low-income households.

“However, a substantial improvement in job creation in recent months and Sassa’s [South African Social Security Agency] commitment to resume the SRD grant payments at the end of June – as well as to catch-up all missed payments from July – probably prevented an even more pronounced decline in low-income confidence during the second quarter,” she adds.

Relief-from-distress beneficiaries have not received April, May payments
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Social relief grant will be impossible to withdraw – Sachs

The CCI report notes that although consumer sentiment was widely expected to weaken further in the second quarter, given the worsening inflation and interest rate outlook, the extent of the drop in consumer confidence is alarming.

“Save for the panicked level 5 lockdown period during the initial outbreak of the Covid pandemic in SA [ Q2 2020, when confidence nosedived to -33], the FNB/BER CCI is now at its lowest level in 35 years.”

While household consumption expenditure still surprised on the upside in the first quarter of 2022, the dramatic deterioration in confidence points to a sudden slump in consumers’ willingness to spend and foreshadows a significant slowdown in real consumer spending growth relative to the strong first quarter,” it says.


Even though consumers are likely to tighten their purse strings, FNB points out that the surprisingly large fall in the CCI could “signify somewhat of an overreaction” to recent developments. The bank notes that this “may not translate into an equally large contraction in consumer spending”.

Says Matikinca-Ngwenya: “Positive developments such as the scrapping of all remaining Covid-19 regulations – including the wearing of masks, limits on gatherings and border checks – a gradual recovery in job creation and the back payment of missed SRD grants could counter some of the mounting inflationary and interest rate pressures.”

Read: South Africa repeals Covid rules on mask-wearing, gatherings, entry


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What Luthuli House does to the local economy and infrastructure through incompetence and criminality, Putin does to Ukraine by using his war machine. The ANC is the worst disaster to hit this country since the Anglo-Boer war.

After this week of level 6 loadshredding I hate to imagine what the survey looks like

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