Light at the end of the tunnel for economic growth
A report out of the USA shows that the franchise sector created 27 913 jobs in June alone - the highest monthly number in the past year - bringing the annual number of employment opportunities in the market to more than 175 000, according to the ADP National Franchise Report. There is no question that the trend in franchise growth in the US is upward and whilst challenges still exist in our own industry, South Africa's community of franchisors are a resilient bunch who won't let anything get in their way to business success. This can be borne out by the encouraging results of listed franchise companies and of those going all out to expand their brands.
Figures released by the Bureau for Economic Research (BER) on the consumer confidence index shows consumer confidence bouncing back from a nine-year low - from -7 in the first quarter of 2013 to an encouraging 1 in the second quarter. This signals a recovery in the main economic engine - that of household spending - across all income and population groups. Boosted by the improvement in retail and car sales, but still under the threat of record high fuel prices, rising food inflation, muted job creation and slower growth in government, FNB's economist Sizwe Nxedlana warns that in order for the rise in consumer confidence levels to translate into a more permanent improvement in household consumption expenditure, "there also needs to be a sustained recovery in real disposable income growth and household credit extension."
An analysis of the survey results by household income group shows that, although consumer confidence levels improved across the board during the 2nd quarter of 2013, the rise was larger and the actual levels remain higher for middle and high income consumers compared to the low income group earning less than R2 000 per month. As a result middle and high income consumers are notable more optimistic about the outlook for their household finances and less concerned about the appropriateness of the present time to buy durable goods compared to low income consumers.