Consumer confidence declined in the third quarter, with the middle class driving the decline, according to the FNB/BER consumer confidence index (CCI).
The report released on Thursday by FNB and the Bureau for Economic Research (BER) shows that the index dropped to minus 13 from minus 10 in the second quarter, signalling a likely slowdown in household spending.
The decline was led by middle-income households earning between R5,000 and R20,000 a month, whose confidence collapsed from minus 7 to minus 16. The CCI said this group is under increasing pressure from rising food inflation, weak job creation and the fading boost from one-off pension withdrawals, factors that could weigh on retail sales in the months ahead.
In contrast, low-income confidence improved due to above inflation social grant increases, while high-income households held steady on lower debt costs, stronger equity markets and a firm rand.
“Weak job creation, rising inflation and dwindling two-pot funds have likely started to weigh on the confidence levels of the middle class,” said FNB chief economist Mamello Matikinca-Ngwenya.
According to the BER, retail and wholesaler confidence also weakened in quarter three, signalling softer demand ahead. Retail confidence fell to 32% from 42%, dropping below its long-term average, while wholesale confidence dropped from 50% to 38% after five strong quarters. In contrast, new-vehicle dealer confidence jumped 12 points to 54%, its highest level since 2022.
Household spending growth eased from 3.2% in the first quarter to 2.8% in the second, and analysts expect a sharper slowdown towards year-end. While durable goods and high-end retailers may remain resilient, broader consumer demand is likely to soften without further rate cuts or a rebound in employment.
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