Consumer confidence recovers in third quarter but remains fragile

Consumer confidence recovered somewhat in the third quarter of 2026 after crashing in the second but remains in fragile territory, with any big improvement in household spending likely to take some time, according to a report published on Thursday.

The First National Bank (FNB)/Bureau for Economic Research consumer confidence index clawed back some of its previous quarter losses to sit at a negative 13 from negative 19, though price pressures still lurk, particularly from domestic fuel costs.

Crucially, the price of Brent crude oil has soared from about $90 per barrel, when the survey was conducted, to more than $100 per barrel in recent days, signalling continued strain on the real disposable income of consumers since South Africa is a net importer of oil and petroleum products.

The latest daily estimates from the Central Energy Fund suggest the price of 95-grade petrol will rise by R2.62/ l in the economic hub of Gauteng in October, while the wholesale price of 0.005% sulphur-grade diesel is on track to jump by R2.81, after increases of R1.34 and R3.15, respectively , in September.

“These factors suggest that consumers are likely to remain cautious about increasing discretionary spending in the near term, with any meaningful acceleration in household expenditure growth therefore likely to be slow,” the consumer confidence report says.

A breakdown by income groups shows that high- and middle-income households’ confidence recovered about half of the ground lost in the second quarter, while low-income households’ confidence rebounded to its highest level since the third quarter of 2024.

“Though higher bus and taxi fares have also increased the transport costs of less-affluent consumers, low food inflation has shielded the budgets of low-income households,” FNB chief economist Mamello Matikinca-Ngwenya said.

“In contrast, high-income households have been much harder hit by soaring petrol and diesel prices, as they largely rely on private transport, where costs have increased much more. They also spend a much smaller portion of their household budgets on food, where inflation has been so low.”

Respondents were surveyed on the expected performance of the economy and the expected financial position of households over the next 12 months, as well as the rating of the appropriateness of the present time to buy durable goods such as furniture, appliances and electronic equipment.

A low level of confidence indicates consumers are concerned about the future, in which case they tend to limit their spending to necessities such as food and services to free up income for debt repayment.

In the third quarter, the economic outlook subindex jumped and recovered to a negative 17 from negative 32, while the household finances subindex increased to five index points from zero.