Consumers more upbeat, but worry over SA economy
Research by Nielsen shows that South African consumers are most concerned about the state of the economy, but despite this, consumer confidence has improved since the second quarter.
Nielsen’s Consumer Confidence Index (CCI) for the third quarter shows a rise of nine points from 78 reported in the second quarter to 87 in the third quarter. This is a substantial improvement from the figure in the first quarter, which was at its lowest level in 11 years at 75 points. The research was conducted through a survey between August 10 and September 2.
“We saw a definite increase in overall consumer confidence in the measurement period, which coincided with the municipal elections and a subsequent strengthening of the rand,” said Bryan Sun, head of Nielsen South Africa. However it is yet to be seen if this trend will continue, given current volatility in the economy and political scene, he added.
Of the consumers surveyed, 30% said they were most concerned about the state of the economy. Debt is also a concern for 23% of South Africans, up three percentage points from the first quarter’s survey.
As for job prospects, consumers are more positive. About 5% of consumers believe their prospects are “excellent”, versus the 2% recorded in the first quarter. More than a quarter (26%) of consumers believe their job prospects are good.
“Local government elections held in August resulted in a major party shift that promised significant reform in service delivery and anti-corruption, which should positively affect the job market,” said Sun.
About 47% of consumers feel good about the state of their finances for the next 12 months. However more than half (51%) of consumers do not believe now is a good time to buy things they want and need. And 40% of consumers will use their spare cash to pay debt, credit cards and loans.
More consumers (85%) have changed their spending in an effort to save on household expenses.
Consumers may be cutting back on spend in certain instances, but are also adapting spending patterns. This means some consumers may buy in bulk or reconsider what can be determined as essential.
Research shows that shoppers are not cutting back on all premium products. This shows consumers stick with quality.