Tuesday, 07 July 2020 14:13

 

Consumer confidence plunged to record lows in 35 years during the second quarter of 2020 due to the halt in economic activity in the three months to June.

The FNB/BER Consumer Confidence Index (CCI) plummeted from an already depressed level of -9 in the first quarter of 2020 to a shocking -33 during the second quarter.
 
The latest CCI reading is now only 3 index points shy of the all-time lowest consumer confidence level of -36 recorded in 1985.
 
FNB said consumer confidence was severely affected by the outbreak of the coronavirus (Covid-19) pandemic and subsequent severe restrictions during the three months to June. 

South Africa’s economy was already frail before the coronavirus outbreak hit the country in March, with its recession deepening in the first quarter of 2020 dragged by declining mining and manufacturing activities.

“Millions of workers were placed on unpaid leave or reduced pay, or even retrenched, as businesses scrambled to survive the lockdown - this severely constrained household income, and therefore consumers’ ability to spend,” Mamello Matikinca-Ngwenya, chief economist at FNB, said in a statement.

FNB said the dramatic decline in the CCI during the second quarter can be ascribed to a further deterioration in the economic outlook index, and major drops in the household finances and time-to-buy durable goods indices.