South African consumers regained some confidence in the economy in the third quarter after consumer confidence hit a 35-year low in the previous quarter, a survey showed on Monday, as the country businesses from the lockdown.
The consumer confidence index (CCI), sponsored by First National Bank and compiled by the Bureau for Economic Research, edged up to minus 23 points in the quarter from minus 33 points in the second quarter.
According to the survey, the partial recovery took place as consumers were able to resume work and add to household finances, which spurred spending on some durable goods. However, big-ticket purchases such as vehicles and furniture were still low priority.
“The gradual lifting of restrictions and the resumption of economic activity as South Africa moved from level 4 of the risk-adjusted strategy in May to level 3 in June and level 2 in August have finally allowed most consumers to go back to work and earn a living,” FNB chief economist Mamello Matikinca-Ngwenya said.
The survey, however, reinforced economists’ view that the Covid-19 crisis and economic restrictions were a blow to consumers’ ability to spend — and that it may take years for the confidence and household incomes to rebound.
Strict lockdown
Between March and June, South Africa enforced one the world’s strictest lockdowns, forcing mines, manufacturers, retailers and services to shut down or operate under tight regulation.
Last month, South Africa re-opened its borders for leisure travel, lifting the bans on the sale of alcohol and tobacco products and permitting visits to family and friends in small groups.
The BER switched to telephone call surveys in the third quarter of 2019, and the 500 respondents are representatives of the racial and household income composition of the urban adult population of South Africa. — Reported by Samantha Machado, (c) 2020 Reuters