High earners less confident

2011-03-16 00:00

CONSUMERS will continue to spend on durable and semi-durable goods and big-ticket items such as motor vehicles, despite a dip in consumer confidence in the first three months of this year.

So says FNB’s chief economist, Dr Cees Bruggemans, who told The Witness that income and spending have continued to grow in recent months.

He said the latest FNB/Bureau for Economic Research consumer confidence index dropped by five index points — from +14 in the final quarter of 2010 to +9 in the first quarter of 2011.

Although the index is in relatively positive territory, it was bogged down by a drop in confidence levels among high-income earners.

Confidence levels among low-income earners (households with an income of less than R5 000 per month) remained steady in the first three months of the year.

Bruggemans said rising prices, for oil and probably food will have an impact on inflation.

“The risks are higher than we ever supposed. But for the moment it is not a massive adjustment that needs to be made on the part of consumers. Income and spending are growing in the meantime,” Bruggemans said.

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