Conducted bi-annually, the survey analyses consumers' perceptions on economic conditions over the next six months with regards to five variables: Employment, Economy, Regular Income, Stock Market and Quality of Life.
South Africa is one of only two countries in the SAMEA region to show positive confidence growth in all five categories surveyed over the previous period. The greatest contributor to this positive result was expectations for Stock Market performance, with the indicator of 23.2% from the previous six months, with the least positive of the indicators being Regular Income and Employment. Other confidence indicators in relation to the Economy and Quality of Life increased by 18.6% and 14.9% respectively.
"This increase in consumer confidence was certainly underwritten by lower interest rates, higher financial growth and a better overall South African economic climate," said Eddie Grobler, senior vice president and general manager of MasterCard Southern Africa.
"The latest South African MasterIndex results not only confirm other positive economic news about the country but also shows the broad based nature of our economic revival. From consumption to investment, jobs and even the overall quality of life, average South Africans have become more confident about their futures," he continued.
Of the seven countries researched in the region, South Africa was the fourth most optimistic overall with a MasterIndex of 79.6. Saudi, Kuwaiti, and United Arab Emirates consumers, were measured as being more optimistic than South African consumers with Indian, Egyptian and Lebanese consumers more pessimistic.
"While South Africa is only the fourth most positive country in this survey, one must remember that all three countries that have a higher confidence index are oil producers and with the current record high oil prices this would be understandable," said Mike Schussler, senior chief economist at T-Sec. "South Africa is therefore the most confident country on the overall MasterIndex other than the oil producing countries," he continued.
Schussler explained that while increases in expectations about regular income and employment were not as good as the other three indicators, they were still positive. With the large informal economy in South Africa, it is not surprising that the outlook for regular income would show the slowest improvement, as many in the informal economy are not receiving a very stable stream of income.
"The increases in employment outlook, as well as regular income, are underwritten further by the latest publications from Stats SA. The Labour Force Survey (LFS) as well as the Survey of Employment and Earnings (SEE), all show increases in employment and formal sector regular income," Schussler added.
The research was conducted in August this year amongst a sample of 400 consumers in each market. In total, 2,845 respondents were surveyed. Consumer sentiment in the entire SAMEA Region as a whole improved slightly reaching 69.8 from 65.8 in the first half of 2004. This slight improvement is particularly apparent on four out of the five MasterIndex factors, namely Economy, Employment, Stock Market and Regular Income.
"We are confident that MasterIndex delivers high-quality information which will help MasterCard's member financial institutions and the private and public sectors in decision making and strategic planning. Equally important, the survey is valuable in the anticipation and understanding of shifts in South African consumer sentiments, as well as the identification of market trends" concluded Grobler.
