(4 minutes read)
· Consumer confidence in South Africa has hit at 1985 levels, as low as it was during the apartheid resistance times
· SA’s consumer confidence index dropped from( -)9 in the first quarter to ( -) 33 during the second quarter of 2020
Consumer confidence in South Africa has hit at 1985 levels, as low as it was during the apartheid resistance times. That trajectory was also marked by the country’s worst debt crisis.
SA’s consumer confidence index dropped from ( -)9 in the first quarter to( -)33 during the second quarter of 2020, says the latest index prepared by FNB and Bureau of Economic Research. The nation-wide lockdown was in full force for the month of April.
The latest CCI index is only 3 index points short of the all-time lowest consumer confidence level (of -36) recorded in 1985. That was the year, which witnessed violent resistance against apartheid followed by a partial state of emergency and subsequent debt crisis. The present survey was conducted in the first two weeks of June. During that time, most retail outlets were open. Major factors that affected the decline in index are poor economic outlook, weak outlook on household finances and insufficient demand for durable goods.
Weak demand for goods and services were caused by economic restrictions, which affected both consumers’ ability and willingness to spend. Large scale unemployment, retrenchment, reduced pay etc were the other reasons for decline in the index points.
During bad times, it is natural that consumers will be postponing spend on big-ticket items such as vehicles, household furniture and jewelry. According to the SA Reserve Bank and as reported by www.trendsnafrica.com, the economy would shrink by 32.6% during the second quarter. Only by 2021-22, the predictions say, the South African economy is expected to show buoyant growth rates.
