Uptick in SA professionals confidence on rand, economy - Survey
23 April 2014 | Surveys, Reports and Ratings | General | Gerhard Joubert, PPS
Results from the 2014 first quarter PPS Graduate Professionals Confidence Index (PCI) reveal that South African graduate professionals are slightly more confident about the outlook for the economy and the prospects for the Rand than they were in the last quarter of 2013.
According to the PPS survey conducted among approximately 5000 of SA’s professionals, 76% of respondents said they expected the Rand to weaken further during the course of 2014, compared to 85% in the fourth quarter of 2013.
Respondents also revealed a confidence level of 54% when asked about their confidence in the economic outlook for SA over the next 12 months - a jump of four percentage points over the previous quarter.
Gerhard Joubert, Head of Group Marketing and Stakeholder Relations at PPS, says that while professionals are still concerned about the value of the Rand, it is clear that an increasing percentage of them believe that the slide in the value of the currency has been halted.
"This belief could be as a result of a number of factors, including the Rand reaching a three month high in April.”
Economists are pointing to two international factors which could be attributing the increased strength of the Rand, says Joubert. "The announcement by the US Federal Reserve that it is cautious about raising US interest rates, paired with the current crisis in the Ukraine that is resulting in a shift in investments from Russia towards other emerging markets such as SA, could be making the Rand more attractive to foreign investors.”
This increased interest from foreign investors is mirrored by Johannesburg Stock Exchange (JSE) data which reveals that foreign investors have bought R14bn of South African bonds since the beginning of February, following outflows of R22.5bn in January.
This increased confidence is also in line with the Bureau for Economic Research (BER) Consumer Confidence report which showed that South African Consumer Confidence increased to -6 in the first quarter of 2014 from -7 in the fourth quarter of 2013.
Other economic related data from the PCI reveals that professionals’ confidence level in the local equity and share market increased four percentage points to 62%, while a confidence level of 56% (versus 53% in the previous quarter) was recorded when respondents were asked whether SA has seen the worst of the global economic turmoil.
The survey also revealed that graduate professionals displayed an average confidence level of 79% when asked about their perception of the future of their profession in the country over the next five years. In addition to this, 60% of respondents would encourage their children to enter their profession.
"The first quarter survey reveals a greater confidence in the local economy from respondents, which is incredibly positive as these professionals play an important role in providing skills which sustain the economy,” concludes Joubert.
Other results from the survey
• Confidence in their ability to earn an income that keeps up with inflation increased by one percentage point to 70% quarter-on-quarter;
• 60% of respondents are confident they have saved enough to retire comfortably, up one percentage point quarter-on-quarter;
• 10% of respondents believe the tax incentives offered by government are enough to encourage South Africans to save;
• 67% of respondents believe compulsory preservation is necessary to enforce South Africans to save.
