South African consumers are pessimistic about the country’s economy and prospects for wealth in 2016.<\/p>\n
This is according to the Credit Suisse Emerging Markets Consumer Survey 2016, which showed that only 4% of respondents based in SA expect their personal finances to improve over the next six months, considerably lower than the 11% last year and well below the survey average of 16%.<\/p>\n
The report was compiled by research firm Nielsen, which conducted nearly 16,000 face-to-face interviews across nine emerging economies, including South Africa.<\/p>\n
Three in 10 respondents said they had no extra money for saving at the end of each month – this was down from 38% in the prior report, and also below the survey average of 32%.<\/p>\n
For those who manage to save, they used the following distribution channels:<\/p>\n
South Africa ranked at the low end of a range of the survey’s indicators with continued disparities between income groups, the report said.<\/p>\n
“South African consumers face multiple challenges in 2016, with higher inflation due to severe drought conditions and a weak currency, as well as likely interest rate increases demanding higher shares of already constrained disposable incomes,” Credit Suisse said.<\/p>\n
“The prospect of job cuts in the mining industry looms large, and will likely place further pressure on low-income households.”<\/p>\n
“Mid- and higher-income households will likely face further interest rate hikes this year and, combined with currency weakness, constrain purchases of higher-end, often imported products.”<\/p>\n
Despite general pessimism in the market, high earning South Africans (earning over R30,000 a month) were confident they would see their fortunes increase over the next 6 months – while the poorest (earning less than R3,000 a month) expected wealth to slip away.<\/p>\n
Across the board, however, South Africans expect to be hit hard by inflation, with low income expectations and tighter personal finances.<\/p>\n
In 2015’s report – during more stable economic times – South Africans reported high spending on internet access and smartphones; however in 2016, alcohol has gained the most spending momentum, with spirits and beer ranked as the top two ‘added expenditure’ items in SA households.<\/p>\n
This is followed by internet access and smartphones, followed by holidays, cosmetics and property.<\/p>\n
TV and extra education have experienced a decline in spending momentum, the report showed.<\/p>\n
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