RELIABLE electricity supply and falling petrol prices helped consumer confidence rebound in the third quarter to just under the line between pessimism and optimism.
Though the average shopper remained slightly pessimistic, high-income earners and blacks edged back into optimistic territory, the quarterly poll done by Stellenbosch University's Bureau of Economic Research found.
Cees Bruggemans, chief economist at First National Bank, which sponsors the BER consumer confidence index, interpreted the five-point gain as a "minor correcting bounce" after the first two quarters' cumulative 28 point crash caused by power blackouts and relentless interest rate hikes.
He forecast that future quarters will show renewed declines, reflecting events such as the global banking crisis, causing the rand to be at R9/$, which has worsened the inflation outlook again. The third quarter's more optimistic inflation outlook prompted the Reserve Bank to hold interest rates steady for the third time in August.
The survey found consumers are not as optimistic as economists that the Bank's Monetary Policy Committee will vote to hold the repo rate at 12percent again tomorrow or that there is a good chance of interest rates falling early next year.
Most people surveyed said they were reluctant to borrow.
"Consumers seem to be alert to the dynamic of changing events and accompanying fortunes, though prudently becoming more cautious about indebtedness while enjoying more fully their existing stock of durable goods and delaying replacement more," Bruggemans said.
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