Johannesburg - SA consumer expectations for the rest of 2009 have fallen to a five-year low, according to Mastercard's worldwide consumer confidence index.
However, at 67.3 index points (down 11.4 points from the first half of the year) they remain well above an optimism threshold of 50 index points.
This latest survey, involving face-to-face interviews with 600 South Africans, was conducted between March 23 and the April 18 2009.
"The decline is consistent with the ongoing global recession as well as the more recent news that South Africa's economy is in its first technical recession in 17 years," said Anthony West, general manager for Africa at Mastercard.
"South African consumers nevertheless remain optimistic - and far more so than nearly all of the 21 markets included in the survey."
While this was South Africa's second-steepest decline in five years, the country appears to be holding up relatively well in comparison to other markets throughout the Asia-Pacific, Middle East, and Africa (APMEA) region, said West.
The index is released twice a year and is based on a survey questioning participants on five key economic factors: employment, economy, regular income, the stock market and quality of life.
The South African survey focuses on Johannesburg, Cape Town and Durban. With a score of 68.0, Durban remained South Africa's most optimistic city. However, for the first time in two years Cape Town, with a score of 66.7, was more optimistic than Johannesburg, which reported an all-time low of 66.5.
Economists.co.za CEO Mike Schüssler said the reason for the 16.8 point decline in Johannesburg's overall confidence levels from 83.3 six months ago could be due to the fact that most multi-national companies are based in the greater Johannesburg area, and have been feeling the pinch of the global recession to a greater extent than local firms.
SA market 'least worse-off'
Noting a particularly steep decline in Johannesburg's quality of life score - from 81.1 six months ago to a current score of 61.9 - Schüssler suggested the many major building and road construction delays and traffic jams may to be blame.
Cape Town's index score is up 9.4 points from its low of 57.3 reported six months ago, albeit short of where it was a year ago at 72.8. Four of the five factors experienced an overall increase, with only the stock market indicator falling by a small margin from 43.5 to 41.4. Although declining 21.6 points, Durban is holding up relatively well amidst the economic slowdown.
"With the survey having been conducted just before the 6.4% contraction in South Africa's gross domestic product (GDP) was announced recently, it seems that most consumers feel the economy will make a turn and start heading upwards," said Sch¨ssler. "Interest rates have also come down by 450 basis points since December, contributing to the positive outlook for the economy over the next six months."
Although South African consumers are much less confident than usual, they are considerably more optimistic than the majority of those throughout the APMEA region. With consumer confidence having fallen from 56.9 to 44.1 since the last survey was conducted, APMEA consumers are, for the first time since 2004, pessimistic about what the next six months have in store for them.
Leading this decline were markets such as Hong Kong, Singapore, and the United Arab Emirates, each of which experienced declines of over 50 points from where their consumer confidence scores were a year ago. In total, 16 of the 21 APMEA markets saw declines in their consumer confidence scores - with an average fall from an optimistic 56.9 to a pessimistic 44.1.
The declines were so extensive that South Africa is currently one of just seven markets that remain optimistic. In fact, South Africa's score is the region's third highest - only the consumers in India and Qatar (68.0 and 71.4, respectively) are more optimistic.
"South Africans are still bullish despite the recession," Sch%uuml;ssler said. "It is important to note that a score above 50 is still optimistic, albeit not at the levels we have experienced in the past."
"As our new finance minister, Pravin Gordhan, recently commented, South Africa appears to be among the least worse-off markets in the world to be affected by the recession."
- Fin24.com