Consumer confidence remained unchanged in the first quarter of the year compared to the previous quarter, according to the FNB/BER consumer confidence index released on Monday.
"Consumer confidence is currently at a fairly neutral level, neither supporting nor impeding consumer spending," FNB chief economist Cees Bruggemans said in a statement.
The index is +5 index points in the fourth quarter of 2011, and in the first quarter of this year. This is after falling by seven index points to +4 in the third quarter of last year.
The average reading for the consumer confidence index since 1994 is +6 index points. The index combines the results of three questions asked of 2500 urban adults in February 2012.
They are asked about the expected performance of the economy, the expected financial situation of their 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 first quarter, a slightly higher percentage of consumers said they expected the economic situation in South Africa to improve over the next 12 months. The sub-index was +4.
This probably reflects accelerated economic growth in the fourth quarter last year, improved global sentiment and solid gains on the Johannesburg Stock Exchange, Bruggemans said.
Job growth as reported by the Quarterly Labour Force Survey by Statistics SA could also have improved sentiment.
The percentage of consumers expecting their financial position to improve over the next 12 months remained virtually unchanged between the last quarter of 2011 and first quarter of this year. It was at a high level of +16.
The time to buy durable goods sub-index dropped from -2 to -6 index points.
"The deterioration in the time to buy durable goods sub-index does suggest that the durable goods replacement cycle may be slowing down and that the growth in durable goods sales volumes is set to slow from the brisk tempo registered during 2011."
The drop in this index correlates with the deceleration in the growth of vehicle sales in the first quarter of 2012 and the latest official retail sales statistics for January showing a marked slowdown in the volume growth of durable goods.
Bruggemans said consumers' ability to spend would be constrained by rising inflation, strict bank lending criteria and the changes in taxation and government spending announced in the February budget.
"In all, the growth in real consumer spending is therefore likely to moderate from the sturdy rates recorded during 2011, with the slowdown in the durable goods sector likely to be the most pronounced in 2012," he said.
Sapa
