According to the MasterCard Index of Consumer Confidence released on Wednesday, the country’s consumer confidence was 58.7 points, a 2.4 point improvement to last year’s score of 56.3.
The index currently described consumer confidence as “neutral-positive”.
In its 11th year, the index was based on a forward-looking survey which measured consumer sentiment and expectations of the country’s performance using five economic indicators.
These were economy, employment, stock market, regular income, and quality of life.
A score of zero was the most pessimistic, while 100 was the most optimistic, with 50 being neutral.
Cape Town’s “optimistic” score of 63.7 was a substantial upturn from the city’s score of 34.2 points in 2013.
Johannesburg recorded the largest dip in consumer confidence, down 12.5 points to 57.4 in 2014, while Durban’s score declined 3.1 points to 52.2.
Mark Elliot, MasterCard South Africa division president, said Cape Town’s improvement saw it move from being the most pessimistic city, to the most optimistic, in the space of a year.
“If one were to omit Cape Town’s score from the overall South African consumer confidence figure, the index would show a significant year-on-year decline in consumer confidence,” he said.
Economist and Frontier Advisory CEO Martyn Davies attributed Cape Town’s improvement to better public sector governance in the Western Cape.
Johannesburg, the industrial and commercial heart of the South African economy, had borne the knock-on effects of protracted, damaging strike action and reduced consumer spending.
This negatively impacted consumers’ overall economic outlook.
In regards to the five economic indicators, the largest shifts occurred in the quality of life and regular income categories.
Quality of life increased 3.4 points to a neutral 53.9, and regular income increased 8.1 points to an optimistic 77.
Compared to the other indicators, regular income recorded the highest increase in optimism compared to the 2013 Index.
Davies said South Africans had traditionally remained optimistic about regular income, which pointed to relative stability in the labour market thanks to legislative protection offered to the employed.
The only indicator to decline in 2014, economy, scored a neutral 51.4, a decrease of 2.7 points from 2013.
“Perceptions of regular income may be very positive, but South Africa’s economic outlook is undoubtedly subdued,” said Davies.
“This speaks to the divided economy we have in South Africa — the polarisation of the haves and the have-nots.”
This year, South African consumers were only marginally more positive regarding employment, up 1.5 points to a neutral 56.2, and the stock market, up 1.4 points to a neutral 55.
Among other African countries, Kenya had the lowest score, having dropped from 76.5 last year to a pessimistic 38.8.
Nigeria remained the most optimistic, at 95.8, followed by Morocco (79.6) and South Africa (58.7).
While overall expectations of Africa’s prospects had fallen 8.3 points to 70.8, respondents were still optimistic about the continent’s outlook.
South Africa’s consumer confidence peak was 91.1 points in the second half of 2006.