The South African Chamber of Commerce and Industry (SACCI), which released the report on Tuesday, explained that the index had fallen back by 1.4 index points in February 2014, after having shed 1.4 index points in January this year.
“The 91.7 average for the first quarter of 2014 is 0.4 index points better than in the fourth quarter average of 2013, but still 0.8 points below the average of 92.5 for the first quarter of last year,” SACCI said in its report.
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The report added that only two of the thirteen sub-indices used to compile the index had negative month-on-month impacts in March 2014. The sub-indices include municipal services, manufacturing, exports and imports.
Consumer patters and constrains have also been a significant feature in the index’s shift, with SACCI noting that more income was obtained from social benefits than from entrepreneurial returns.
18 per cent of consumer revenue came from social benefits, and 15 per cent from entrepreneurial returns. Majority of consumer revenue however came from employees, at 58 per cent.
“The South African consumer is under pressure on various fronts. Private consumption expenditure is by far the largest part of demand in the economy – about 46 per cent in 2013 – and is therefore of special importance,” the report explained.
“The other demand components are from abroad: exports at 23 per cent, fixed capital formation and spending on inventories at 14 per cent and consumption by the government at 17 per cent.”
SACCI added that as a result of South Africa’s economic output failing to be in line with job creation, consumers have resulted in either borrowing more debt or reverting to strike action. This is to either maintain or enhance their current living conditions.
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“A serious issue at stake is whether the consumer will be able to service debt and repay loans. It is clear that the consumer is in a worse position than a few years ago and finds it difficult to remedy the situation,” said SACCI.