Unisa’s Bureau of Market Research (BMR) have released figures relating to consumer confidence and vulnerability to economic pressures after conducting interviews with 3 000 consumers as well as just over 100 “key” informants (incl. credit, service providers & municipalities ).
They report that households’ confidence in their ability to service their debt has improved but their research also shows it would take only a 0.5% increase in interest rates to tip consumers back into a state of “financial vulnerability” in terms of debt servicing. The Reserve Bank’s repo rate (which was 12 % back in Dec ’08) has been at 5.5 % since Nov ’10 and most economists agree they expect to see no change during 2012.
At a presentation by BMR, Research Director, Carel van Aardt said that households were feeling less vulnerable to financial conditions. However, consumers remained financially vulnerable.
Bernadene de Clercq, the Head of the Personal Finance research unit at Unisa, attributed the latest improved attitudes by consumers to stable interest rates, a high inflation rate (which ironically reduces the true value of debt), low household credit growth (as households rather try pay off existing debt) and trust in the debt counselling process.
She noted the number of defaults and consent judgments against individuals in the fourth quarter of 2011 had fallen 4.7 % compared with the previous quarter and an amazing 23.5 % compared to the previous years figures.