Business Climate Index stabilises
The IJG Business Climate Index stabilised in February after its January contraction, coming in at 163.2 points, up marginally from 161.2 points in January.
The index stabilisation was largely driven by a decline in inflation rather than a major recovery in the majority of the key indicators measured in the index and its subcomponents.
Inflation fell to 3.6 percent during the month mainly on account of the oil price, which has fallen dramatically over the past 8 months, and the lagged transmission of the declining price.
The oil price sub-index remains elevated as oil prices are still depressed, but has been somewhat negatively affected by a depreciating rand vis-à-vis the US Dollar. Vehicle sales climbed once again in February after the seasonal slow down in December and January, as did building plans approved. Through February, a total of 1,947 vehicles were sold, of which 1,126 were commercial and the rest passenger. The metal price sub-index recovered slightly through February mainly due to a slight uptick in the copper price following its dramatic decline through January. In this regard, between December and January the price of the commodity fell 13.0 percent. However, through February copper recovered somewhat, up 6.9 percent.
The meat price index declined by 3.7 percent through February as a poor start to the rainy season saw farmers look to reduce stock levels. This resulted in a sizable increase in the supply of livestock at abattoirs, which in turn resulted in a decline in prices. The IJG Business Climate Index stabilised in February after retreating from all-time highs in January. All of the broad indices and indicators monitored expanded during the month except the export index, which contracted by 0.1 point. On a quarterly basis, however, the Business Climate Index, Investment index and Coincident Indicator are down, while the Consumption and Export indices and the Leading indicator are up.