Quantec's Consumer Vulnerability Index (CVI) has recorded a stable pattern since the fourth quarter of 2010 at a level of 47 points. After reaching dangerously high levels during 2008, the the index had, by the end of 2009, dropped to around one standard deviation above its median value of the past three decades. During 2010 and 2011, the index showed some considerable improvement, dropping below its median value. Since reaching a high of 76 index points in the fourth quarter of 2008, there was a 38% decline in consumer vulnerability up to the third quarter of 2011.
Households' vulnerability improved over the past number of quarters mostly in the areas of indebtedness. Low interest ensured that debt servicing costs declined significantly, while households' savings efforts also showed some improvement. However, employment growth remained depressed while the lack of improvement in residential property values meant that households' net worth remained under pressure. Credit uptake by households did appear to be picking up by the end of 2010, but recent numbers suggest that this growth is again subsiding. The economy's performance and the extent to which employment growth will continue in 2012, will be very important determinants of households' ability to meet their debt obligations and further improve their financial vulnerability.