16 May 2005

From consumption to investment, jobs and overall quality of life, South Africans have become increasingly confident about their futures, according to an international survey conducted for MasterCard.

South Africa's consumer confidence increased by 30% in the space of a year, boosted by low personal taxes, a series of interest rate cuts, employment growth and a bullish stock market, according to the latest MasterIndex of Consumer Confidence survey.

SA's consumer confidence surged from 64.4 points in February 2004 to 83.5 points in February 2005. The maximum reading on the index is 100.

The survey, conducted twice year, seeks to determine consumer perceptions and expectations for the next six months relating to five factors: employment, economy, regular income, stock market and quality of life.

The MasterIndex survey for the South Asia, Middle East and Africa region was conducted in February among a sample of at least 400 consumers - with bank accounts and aged between 18 and 64 - in each of seven selected markets: Egypt, Kuwait, Lebanon, Saudi Arabia, South Africa, United Arab Emirates and India.

SA consumer confidence increased by 35% to 76.6 points regarding employment; by 34% to 85.4 points on the economy; by 9% to 94.3 on regular income; by 50% to 86.6 on the stock market; and by 28% to 74.4 on quality of life.

T-Sec chief economist Mike Schussler told Business Day that the survey's finding on employment and income confidence was supported by the country's employment report, released in April, which showed that formal sector jobs increased by 2.7% in 2004.

"This, combined with last year's gross domestic product of 3.7%, the highest growth rate in four years, means that South Africans are feeling more confident about their future", Schussler said.

According to Business Day, the JSE Securities Exchange SA's all-share index has gained about 3.4% since the beginning of 2004, while interest rates are at 24-year lows of 7% and consumer inflation less mortgage costs is well within the SA Reserve Bank's target at 3.6%.

The FNB/BER consumer confidence index, compiled by the University of Stellenbosch's Bureau for Economic Research, put SA consumer confident at near record highs for the first quarter of 2005.

SouthAfrica.info reporter

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