The deterioration in confidence was reflected across all three components of the survey, with households becoming more pessimistic about the economy, their own finances and the appropriateness of making major purchases.
Image: Ayanda Ndamane / Independent Newspapers
South African households are becoming increasingly concerned about their financial prospects as soaring fuel costs, higher borrowing expenses and economic uncertainty weigh heavily on consumer sentiment.
This is according to the latest First National Bank (FNB) and Bureau for Economic Research (BER) Consumer Confidence Index (CCI) released on Tuesday.
Consumer confidence plunged by 12 index points during the second quarter of 2026, falling from -7 to -19, marking the lowest reading since the first quarter of 2025 when concerns over a proposed VAT increase rattled households and businesses.
The latest decline was largely driven by the economic fallout from the conflict involving Iran and the temporary closure of the Strait of Hormuz, which sent global oil prices soaring and triggered sharp increases in domestic fuel costs.
The deterioration in confidence was reflected across all three components of the survey, with households becoming more pessimistic about the economy, their own finances and the appropriateness of making major purchases.
Particularly concerning was the sharp decline in the household finances index, which dropped from 12 index points in the first quarter to zero in the second quarter. This indicates that the number of consumers expecting their financial position to improve over the next year is now equal to those anticipating a deterioration.
The survey suggests that higher transport costs have placed significant pressure on household budgets. Petrol prices increased by 29% quarter-on-quarter during the second quarter, equivalent to about R5.60 per litre, while diesel prices surged by 57%, or roughly R10 per litre.
The impact has been most severe among middle- and higher-income households, which typically spend more on private transport, travel and debt repayments.
Confidence among high-income households, defined as those earning more than R20 000 per month, collapsed from -4 to -28 index points during the quarter. The survey found that a net 53% of affluent consumers now expect South Africa’s economic performance to worsen over the next 12 months, compared with just 13% in the previous quarter.
High-income consumers also reversed their outlook on personal finances. While a net 14% previously expected their financial position to improve, a net 7% now anticipate a deterioration.
FNB chief economist Mamello Matikinca-Ngwenya said rising fuel costs and tighter financial conditions have disproportionately affected wealthier consumers.
“With a large portion of high-income households making use of privately owned vehicles for transport, the household budgets of affluent consumers have been hard hit by the massive petrol and diesel price increases during the second quarter,” she said.
“Furthermore, the hike in the prime interest rate, soaring air fares and decline in stock prices on the JSE are all developments that disproportionately affect affluent households.”
The JSE's All Share Index has fallen by approximately 12% since its February peak, further eroding wealth and confidence among higher-income consumers.
While low-income households have thus far been shielded from some of the immediate impacts because they rely more heavily on public transport and have benefited from slowing food inflation, economists warn that these pressures may soon spread.
“In contrast, low-income households mainly rely on public transport, where bus and taxi fares have so far increased far less,” said Matikinca-Ngwenya.
“However, the adverse implications for low-income households are expected to mount once the impacts of higher fuel and fertiliser prices filter through the agriculture value chain to food inflation, as poor households spend a large portion of their budgets on food.”
The weakening confidence outlook raises concerns about consumer spending, a key driver of economic growth. Although real consumer spending remained relatively strong at 3.4% year-on-year in the first quarter of 2026, quarterly growth slowed sharply to just 0.1%.
Matikinca-Ngwenya warned that spending could contract during the second quarter as households tighten their budgets.
“The alarming increase in transport costs and hike in the prime interest rate will seriously strain high- and middle-income households’ ability to spend, the income groups with the greatest purchasing power in the economy,” she said.
Investec chief economist Annabel Bishop concurred that the drop in sentiment reflects the squeeze in finances from both higher inflation and higher fuel prices and will weaken purchasing power.
“Much will depend on the speed with which fuel prices decline in SA for both inflation and interest rates, as well as household consumption expenditure, GDP and consumer confidence in SA,” she said.
“GDP is expected to show a weak outturn in Q2.26, causing moderation in the growth outlook for the year, with lower demand anticipated and already suppressing industrial production.”
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