Johannesburg - Consumer confidence dropped for the first quarter of the year, but remained relatively high, according to the First National Bank (FNB)/Burea for Economic Research (BER) consumer confidence index released on Monday.
"The first quarter of 2011 results yielded the first noticeable decline in consumer confidence in over a year," said FNB chief economist Cees Bruggemans.
The FNB/BER consumer confidence index declined by five index points from +14 in the fourth quarter of 2010 to +9 during the first quarter of 2011.
"A reading of +9 indicates that the majority of consumers are satisfied with current conditions and expect these to persist over the next 12 months," Bruggemans said.
Historically, the index has varied between a low point of -33 and a high point of +23.
The current level of +9 can therefore be regarded as relatively high from a historical perspective.
However, the decline in the last quarter was the first noticeable decline in a year and took the index back to the same level as at the end of 2009.
Last year, it remained stable at around +15.
The index combines the results of three questions asked of 2 500 urban adults in February 2011.
They are asked about the expected performance of the economy, the expected financial situation of households and the rating of the appropriateness of the present time to buy big ticket items, such as furniture, appliances and electronic equipment.
In the last quarter, fewer consumers expected the economy and their own finances to improve over the next 12 months.
Fewer also rated the present as the right time to buy durable goods.
High-income earners, with household incomes of R5 000 or more a month, showed declining confidence from +19 in the fourth quarter of 2010 to +11 in the first quarter of 2011.
However, this was still pretty high compared to low-income earners.
The confidence of low-income earners remained virtually unchanged.
"The decline in consumer confidence is consistent with the lower business confidence of retailers reported last week," said Bruggemans.
"Given the historical volatility of the index, too much should not be read into a single decline."