Consumer sentiment in South Africa showed a marked improvement in the final quarter of the year, climbing to its highest level in 2025, according to the latest FNB/BER Consumer Confidence Index (CCI) released this week.
The index rebounded to -9 index points, a significant improvement and the strongest reading of the year. The uplift was broad-based, with positive movements recorded across all three sub-indices that make up the overall measure.
A particularly sharp recovery was noted among middle-income households—those earning between R5,000 and R20,000 per month. Confidence in this group jumped from -16 points in the third quarter to -8 points in the fourth.
In an interview, FNB Senior Economist Siphamandla Mkhwanazi stated that the outcome was better than market expectations, which had predicted sentiment would remain stable. He attributed the rebound to several key factors: recent interest rate cuts, a stronger rand exchange rate making imported goods more affordable, and an influx of cheaper durable goods from China.
“China is diverting goods away from the big markets such as the US to other new markets, including South Africa,” Mkhwanazi explained. “We have seen those consignments from China, particularly of furniture, household appliances, and all these electronics, becoming bigger and bigger as well as cheaper and cheaper.”
The combination of these factors, he said, is improving affordability, and retail sales volumes are already responding. As a result, retail sales for the current festive season are now projected to exceed the numbers seen during the 2023 holiday period.
Looking ahead, Mkhwanazi noted that the survey was conducted from 10-21 November, meaning the latest interest rate cut on 20 November likely had minimal influence on the fourth-quarter result. This, along with other recent positive developments like the sovereign credit rating upgrade from S&P Global and the country’s removal from the global financial grey list, could fuel further optimism in the first quarter of 2025.
“Overall, however, consumer sentiment is closely linked to how the labour market is doing,” Mkhwanazi cautioned, highlighting that sustained job creation will be crucial for maintaining the positive trajectory. He pointed to the addition of approximately 248,000 jobs in the previous quarter as a promising sign that could support further gains in business and consumer confidence in the new year.
