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Johannesburg - The consumer confidence index (CCI) rose marginally by one index point for the fourth quarter of 2011, according to statistics analysed by the Bureau for Economic Research (BER) and financial services group FNB.
"Consumer confidence remains above average supportive of consumer spending," FNB said in a statement on Wednesday.
"However, accelerating inflation will likely dent the growth in real disposable income over the short term. This will probably lead to lower growth in consumer spending given the limited access to bank credit.
"The 1 index point change is so small that for all practical purposes one could say that consumer confidence remained unchanged in 4Q 2011," FNB said.
The index combines the results of three questions posed to adults in South Africa between October 6 to 24, namely the expected performance of the economy, the expected financial position of households and the rating of the appropriateness of the present time to buy durable goods such as furniture, appliances and electronic equipment.
In the third quarter, the CCI fell by 7 index points to 4. The 1 index point increase raised the CCI to 5.
FNB said the CCI increased in the fourth quarter because a slightly higher percentage of consumers expected an improvement in their household finances.
A slightly lower percentage rated the present as the wrong time to buy durable goods relative to the third quarter.
These increases were partially countered by a slight further decline in the percentage of consumers who expected the economic situation in South Africa to improve over the next 12 months.
News reports about the fall in share markets and low economic growth had scared many consumers in the third quarter.
As a result, the percentage of consumers expecting the economy to improve fell sharply and some also expected these factors to adversely affect their own finances.
In the fourth quarter, consumers became even more pessimistic about the economy but were slightly more optimistic about their own finances relative to the third quarter.
"Consumers therefore assess the developments of the past six months (such as the economic problems of the euro area and on the local front, the sharp fall in the rand and rise in inflation) as bad for primarily the economy, but not for their own finances," said Cees Bruggemans, chief economist of FNB.
They had overestimated the adverse impact of these developments on their own finances in the third quarter and consequently revised their expectations about their own finances upwards.
The revisions were mainly concentrated in specific sub-groups.
Researchers found that the confidence of white consumers increased by 5 index points to -5 after they revised their expectations - especially about their own finances - sharply upwards.
The confidence of black consumers remained unchanged at +12 in the fourth quarter.
Their more favourable rating on the purchase of durable goods was countered by lower optimism about the prospects for the economy.
High (earning more than R10 000 a month) and lower middle income earners (R2 000 to R5 000) revised their expectations upwards after they fell sharply in the third quarter.
In contrast, the confidence of high middle income earners (R5 000 to R10 000) declined after remaining unchanged in the third quarter.
However, the level of the FNB/BER CCI was still higher than the long-term average of +2.
The decline was primarily due to a sharp downward revision of the prospects for the economy and not of the prospects for own finances and the rating of the present time to buy durable goods.
"In all, consumer confidence remains above average supportive of consumer spending. This means that consumers will spend the bulk of any increases in real disposable income," FNB said.
However, accelerating inflation would likely dent the growth in real disposable income over the short term.
This would probably lead to lower growth in consumer spending, given the limited access to bank credit.
For the purposes of the BER/FNB CCI, the fourth quarter is the period over October and November.
