Consumers less confident on economy

Mar 07 2013 10:46

Johannesburg - Consumer confidence declined by 21.8 points to a score of 48 in the second half of 2012, a survey by MasterCard revealed on Thursday.

All five key indicators of the MasterCard Index of Consumer Confidence decreased, with four of them showing a decline of more than 20 points.

The latest overall confidence level was significantly lower when compared to the 69.8 of the previous six months. The regular income indicator declined by only 10.3 points, from 80.3 six months ago to a current optimistic score of 70, the highest score of all five indicators.

The quality of life indicator showed the steepest decline of 28.1 points from 70 in the second half of 2012 to 41.9 in the current index.

The MasterCard Index of Consumer Confidence is based on a survey which measures consumer confidence on prevailing expectations in South Africa for the next six months based on the economy, employment, the stock market, regular income, and quality of life.

Zero is the most pessimistic, 100 the most optimistic, and 50 neutral.

The recent survey was conducted in November and December 2012, and involved 11 339 respondents aged 18 to 64 across 25 markets in the Asia Pacific/Middle East/Africa region.

On the African continent, the survey was conducted in Egypt, Kenya, Morocco, Nigeria, and South Africa.

"The index results reflect the uncertainty felt by South Africans in the last six months of 2012, as they considered the six months ahead," said Philip Panaino, division president, MasterCard SA.

Panaino said while the index scores fell sharply, the overall score of 48 was within the index's neutral range (between 40 and 60).

"This means that the South Africans surveyed are neither optimistic nor pessimistic about South Africa for the next six months - they are simply less optimistic than before."

He said consumer expectations for the future were affected by the Marikana mine shooting and labour unrest that swept across the country in late 2012.

Other contributing factors include downgrades by several international ratings agencies, slower private-sector and consumer spending, higher inflation, and persistent unemployment.

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