South African consumer confidence recovered to its strongest level in two years in the fourth quarter as households anticipated better employment prospects and an improvement in their finances.
A quarterly index measuring sentiment rose to -8 from -20 in the previous three-month period, FirstRand Ltd’s First National Bank said in a statement on Thursday. That is the strongest level since the last quarter of 2019, before the coronavirus pandemic struck.
The index has been negative for 14 consecutive quarters, the longest stretch since the series began in 1982, indicating depressed consumer sentiment.
The extent of the rebound relative to the third quarter is a surprise given sustained high inflation, rapidly rising interest rates, frequent power outages and generally bleak prospects for global economic growth, FNB chief economist. Mamello Matikinca-Ngwenya said. The rebound points to a level of resilience among South African consumers, she said.
The household financial outlook sub-index was the main driver of the improvement, jumping 15 index points to reach 13 during the fourth quarter, a reading similar to the 2021 holiday season.
“Young people, ages 16-34, have become much more optimistic about their financial prospects compared to the older generation,” FNB said, pointing to higher job creation among that age group.
The official unemployment rate decreased to 32.9% in the three months to September from 33.9% in the previous quarter, while the youth unemployment rate fell to 44% from 46% in the same period in 2021. South Africa it has also introduced various public work programs for youth.
“A pick-up in job growth, particularly in the now rapidly recovering service sector, and substantially lower gasoline prices since the third quarter no doubt bolstered consumer confidence in the run-up to the holiday season. said Matikinca-Ngwenya.
