South Africa’s latest Consumer Confidence Index (CCI) for the third quarter of 2019 showed a five point decrease to 88, presenting a less positive quarter on quarter picture for consumer sentiment in South Africa.
Nielsen South Africa Connect MD Kerith Botha
says; “Consumer confidence has slipped back to the same level as it was a year ago (Q4, 2018) as South Africans continue to face enormous financial pressures due to subdued economic growth, spiralling utility costs and increased job losses. Nevertheless, our survey reveals that there is still some optimism in terms of their propensity to spend.”
In terms of the daily realities that they face, 19% of South Africans’ monthly budget allocation currently goes towards food and beverages at home, 18% to housing (rent, mortgage and utilities etc) and 10% on education. Amidst increasing traffic congestion, South Africans allocate (9%) of their monthly budget to routine transport and 8% to communication services like mobile phone landline, internet, cable tv etc and savings which illustrates the diverse priorities in their lives.Adept adapters
Looking at how South Africans have adapted to their current financial constraints, 84% say they have changed their spending to save on household expenses, which is unchanged from the previous quarter. The top action they have taken to save on money is once again cutting down on takeaway meals (66%) followed by spending less on new clothes (65%) and switching to cheaper grocery brands (52%). The same number say they are using less on gas and electricity to cut costs, an understandable action in light of surging utility prices.
Delving deeper into their financial outlook and worries, 78% of South Africans think the country is currently in a recession, up 4 points from the previous quarter. When it comes to their top concerns, 33% of South Africans cite the economy as their top concern followed by job security at 28% and crime which comes back into the top three concerns at 26%. Interestingly, 16% South Africans are concerned about rising fuel prices and 15% cite both rising food prices and debt as their top concern a reflection of a South African consumer, whose is under enormous pressure. A glimmer of hope
On a slightly more positive note, once South Africans have met their financial commitments, 82% say they have spare cash, up two points from the previous quarter which may show a small easing on their wallets. The highest number of consumers 48% (up from 47% in the previous quarter) put their disposable income into savings, followed by 32% paying off debts, credit cards and loans.
Twenty eight percent of respondents say they spend spare cash on new clothes, while 19% use it for home improvements. Interestingly, 18% said they spend their spare cash on out of home entertainment, which may well be due to the need for some much needed downtime, away from the daily pressures that they face.
Unfortunately, there has been a significant six point decrease to 27% of South Africans who view their job prospects as excellent or good, with those who say the state of their personal finances over the next 12 months will be excellent or good, also having decreased by four points to 62%.
Botha comments; “Despite this, there has been a small improvement in immediate spending intentions, with a one point increase to 32% South Africans who feel now is a good or excellent time to purchase what they need or want, which may indicate a flicker of improved optimism amongst South African consumers. It will be interesting to see if this translates into increased spend over the festive season shopping periods.” ABOUT THE CONFERENCE BOARD® GLOBAL CONSUMER CONFIDENCE SURVEY
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen. It was conducted in September 2019 and polled more than 32,000 online consumers in 64 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample includes internet users who agreed to participate in this survey and has quotas based on age and gender for each country. It is weighted to be representative of internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. This survey is based only on the behaviour of respondents with online access. Internet penetration rates vary by country. The Conference Board uses a minimum reporting standard of 60% internet penetration or an online population of 10 million for survey inclusion. The Global Consumer Confidence Survey was established in 2005. ABOUT THE CONFERENCE BOARD:
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. Winner of the Consensus Economics 2016 Forecast Accuracy Award (U.S.), The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.orgAbout Nielsen
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