CAPE TOWN: Consumer confidence plummeted in the first quarter of 2015 as consumers felt pessimistic about the economic outlook due to load-shedding and their financial positions following petrol price and tax increases.
The First National Bank/Bureau for Economic Research’s (FNB/BER) consumer confidence index slumped to -4 index points during the first quarter of 2015 from zero in the fourth quarter of 2014.
Marginal personal income tax increases announced in the February budget, a 96c/litre petrol price increase, further depreciation of the rand against the dollar, and an increased level of social and political turmoil were also among factors identified as leading to the fall in consumer confidence.
A drop in consumer confidence reflects reluctance by consumers to spend, which is unsupportive of economic growth. The latest index number is well below the long-term average reading of 5. FNB said the financial positions of consumers and the time to buy durable goods subindices fell slightly, while the economic outlook subindex fell sharply to -11 from -3.
