Consumer Research Africa

Consumer Watch – August 2020

Economic and consumer indicators released in August remain under pressure. Despite 32 396 vehicles sold in July 2020, volumes remained well below pre-lockdown levels. The ABSA PMI of 51.2 points in July represents a -2.7-point m-m decline, however PMI remains above the 50-point neutral mark. SACCI business confidence was still weak at 82.8 points in July following a recovery from the 70.1-point low reported in May 2020. The FNB/BER Consumer Confidence is at an all-time low of -33 points (2Q20). Food and beverage sales continue to deteriorate, falling by -48.9% y-y in June after three consecutive months of double-digit percentage declines. CPI inflation returned to within range at 3.2% y-y in July (+100bps) while PPI inflation recovered from 0.5% to 1.9% y-y. Petrol prices will increase by only 1c/litre in September to R14.48/litre while diesel is set to cost -21c/litre less at R12.67/litre. Annual petrol savings of -5.1% y-y are expected in September as a result. The rand closed the month of August at R16.64/USD which is -10.3% weaker y-y and 0.5% stronger on a m-m.