South African Consumer Confidence Slumps to Lowest Level in Over a Year
The latest consumer confidence survey conducted by First National Bank (FNB) and the Bureau for Economic Research (BER) shows the index falling from ‑7 to ‑19 in the second quarter of 2026 – its weakest reading since early 2025. The drop reflects growing anxiety among households about the cost of living, job security and the broader economic outlook.
Key Findings from the FNB‑BER Survey
The composite Consumer Confidence Index is built from three equally weighted sub‑indices:
- Economic outlook – fell from ‑14 to ‑32 points.
- Household finances – slipped from +12 to zero.
- Durable‑goods purchasing suitability – declined from ‑21 to ‑24 points.
All three components moved downward, signalling a broad‑based deterioration in sentiment.
Drivers Behind the Decline
FNB and BER attribute the sharp fall to three intertwined factors:
- Surging fuel prices – the closure of the Strait of Hormuz, linked to the ongoing Iran‑related conflict, has pushed petrol and diesel costs sharply higher. The analysts estimate that the fuel‑price shock will cost the South African economy roughly US$45 billion in Q2 2026.
- Travel disruptions and market volatility – shipping delays and higher logistics expenses have fed into broader price pressures, while the Johannesburg Stock Exchange (JSE) has seen a dip in share values, further eroding wealth perceptions.
- Monetary‑policy tightening – the South African Reserve Bank (SARB) raised its key repo rate by 25 basis points to 7 % during the survey period, aiming to curb inflation. Higher borrowing costs tend to dampen big‑ticket spending and reinforce cautious consumer behaviour.
Impact of Monetary Policy Tightening
The SARB’s rate increase was announced while most of the fieldwork for the confidence survey was still underway. Analysts note that higher interest rates raise the cost of credit for mortgages, vehicle finance and personal loans, which can quickly translate into reduced appetite for durable goods – a trend already visible in the durable‑goods sub‑index.
Who Is Most Affected?
The survey reveals a pronounced split across income groups. High‑income earners (monthly income > R20 000) showed the steepest deterioration in outlook:
- Only 13 % of this group expected the economy to worsen over the next year in the previous survey.
- In the latest round, 53 % now anticipate a deterioration – a four‑fold increase.
FNB chief economist Mamello Matikinca‑Ngwenya explained that “highlighted that many affluent households rely heavily on private vehicles, making them especially vulnerable to the recent petrol and diesel spikes.
What the Numbers Mean for Spending Behaviour
Low confidence scores typically lead consumers to prioritise essentials such as food and basic utilities while postponing discretionary purchases. Conversely, when confidence rises, households are more likely to take on debt or dip into savings to finance big‑ticket items like furniture, appliances, automobiles and clothing.
The current reading (‑19) suggests a prevailing mood of caution, with many South Africans likely to:
- Limit non‑essential travel and leisure spending.
- Focus on paying down existing debt rather than accumulating new credit.
- Delay purchases of vehicles, home electronics and furniture until they perceive a more stable economic environment.
Outlook and Policy Implications
Analysts warn that if fuel prices remain elevated and the SARB maintains a tightening stance, consumer confidence could stay subdued through the second half of 2026. Policymakers may need to consider targeted relief measures – such as temporary fuel subsidies or tax adjustments – to mitigate the immediate hit to household budgets, while preserving the central bank’s inflation‑control credibility.
For businesses, the data underscores the importance of flexible pricing strategies, value‑focused marketing, and potentially offering financing options that alleviate the upfront cost burden on cautious consumers.
Continued monitoring of the FNB‑BER consumer confidence index, alongside inflation and interest‑rate trends, will be essential for gauging when South African households might regain the optimism needed to drive broader economic recovery.
