Quantec's Consumer Vulnerability Index (CVI) provides a quarterly synopsis of the vulnerability of South African consumers in the face of specific economic developments or events.
Nine indicators of consumer financial health or vulnerability were identified and combined into a single index which can inter alia serve as a warning signal to economic decision makers and to aid banks in gauging the possible impact of household debt and borrowing on their profitability.
Our current reading of the CVI is that it has shown consistent improvement since reaching dangerously high levels during 2008. By the end of 2009, the index had dropped to around one standard deviation above the median value of the past three decades, and during 2010 and the first quarter of 2011, the index showed further improvement. Despite the uptick in consumer vulnerability during the second quarter of 2011, households nevertheless appear to be in a much better position to withstand a deterioration in economic conditions than had been the case in 2007-2008.
In future, Quantec will publish the Consumer Vulnerability Index on a quarterly basis.
