SA consumer confidence cools slightly, down to -6 in Q4

South African consumers are walking into the festive season with a sense of optimism as confidence in the fourth quarter has reached its highest levels since 2019. The latest data from FNB/BER revealed a slight dip in the headline consumer confidence index to minus 6 points from minus 5 in the third quarter. Despite this small decrease, the overall sentiment remains positive, indicating a significant improvement compared to the previous year. Helanya Fourie, Senior Economist at BER, highlighted that the dip should be viewed in the context of the remarkable increase in consumer confidence seen in the previous quarter. She emphasized that the current index reading of minus 6 is still considered high when compared to the historical average since 1994. The positive outlook for the economy and the year ahead has contributed to the upbeat sentiment among consumers in 2024. Factors such as the formation of the GNU and interest rate cuts have bolstered confidence, although some expectations may not have been fully met, leading to the slight decrease in the fourth quarter. High-income consumers appear to have benefited more from certain economic developments, while middle-income households may have concerns related to factors like the two-part retirement system and rising petrol prices. The impact of a weaker rand exchange rate and uncertainties surrounding global events, such as the Trump presidency, could influence consumer confidence in the future. These factors, combined with inflationary pressures, may affect consumer sentiment in the upcoming year. Despite these challenges, the overall outlook remains positive, indicating a significant improvement compared to the previous year.