Durbn Tops

'Durban SA's most positive city'

January 28, 2009 Edition 1 The Mercury
Suren Naidoo
DURBAN has come out as the most optimistic city in South Africa in the latest MasterCard Worldwide Index of Consumer Confidence.
The influential survey - released last week - showed that the city had beat the other major South African urban centres of Johannesburg and Cape Town to top spot in consumer optimism stakes, with a score of 89.6. This was ahead of Johannesburg's score of 83.3 and the Mother City's "grim" score of 57.3.
Now in its fifth year, the biannual MasterCard Worldwide Index of Consumer Confidence surveyed 3 200 South African consumers. The survey is based on answers to questions relating to five key economic indicators, including employment, the economy, regular income, stock market and quality of life. It measures consumer confidence on prevailing expectations in the market for the next six months.
In terms of Durban, the report said the city's residents "remain extraordinarily upbeat in reporting an overall consumer confidence of 89.6".
Scores on all five individual indicators were up from both six months and a year ago - the only South African city where this has been the case. Noted chief economist at T-Sec, Mike Schüssler, said this was "incredible given the present economic climate (in the country)".
In comparison, the report said Cape Town residents had particularly grim expectations for the South African stock market for the next six months. According to Schussler, this was a primary factor in Cape Town's lowest consumer confidence score.
"The decline in Cape Town perhaps has a lot to do with the fall in the financial markets, as many big asset managers are based in the city. The area has also been hit by a decline in tourism - both domestic and international - which is obviously one of its core industries," Schüssler said.
"The Jo'burg consumer outlook, though still very high and up from six months ago, remains short of where it was a year ago . . . My impression is that people simply haven't taken notice yet of South Africa's weakening economic position," he added.
"With the continued fallout from the financial crisis in the world's major markets generating a vicious cycle of negative sentiment, it is good to see there may be some silver lining for us in Durban and South Africa," said acting chief executive of the Durban Investment Promotion Agency (DIPA), Russell Curtis, in response to the MasterCard surveys.
"As consumer confidence has a direct link to business confidence and - by logical extension, to the investments companies make in a city - it is very encouraging that Durbanites recognise our uniquely positive potential, even in these tough times. It is especially significant coming off the back of the recent recognition that Durban has built a good business platform and more sustainable way of life contained in MasterCard's global emerging cities study," he said.
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South Africans have shown encouraging signs in terms of optimism going forward in the latest MasterCard Worldwide Index of Consumer Confidence. This comes in the wake of another survey released just two months ago - the MasterCard Worldwide Centres of Commerce: Emerging Markets Index, which rated all three of South Africa's major hubs among the 65 most influential emerging market cities in the world. While Durban came in at 37, Cape Town and Johannesburg were ranked in 33rd and 11th spot respectively.
The consumer confidence survey revealed that South Africa was the second most optimistic country in the Middle East and Africa region; and came in third spot when the Asia Pacific region is included. South Africa scored 78.7, while Kuwait (at 96.6) came in as the most optimistic country.
"Following a year of slowing economic growth at home and in the face of an imminent global recession, South Africans remain optimistic about the immediate future of their national economy," the survey reported.
However, it noted that although the latest survey score represented an increase in consumer confidence from six months ago, it is five points below South Africa's score for the first half of 2008.
Jeni Webber, South Africa country manager at MasterCard Worldwide, said: "One gets the sense that South African consumers feel relatively optimistic about the next six months.
"Government leaders, bankers, and analysts have been saying that the SA economy will not see a major downturn, as will likely be the case in other markets. South Africans appear to share this optimism."
Curtis said: "South African cities must work harder now to improve and promote our business and investment positions further, to ensure new growth while other global cities are trapped by their national financial doldrums.
"Now appears to be a good time for global companies that thrive on consumer confidence, and looking for greater market access to be targeted by DIPA for introduction to cities like Durban."

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