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Business climate index continues rally

Recent data from the monthly IJG Business Climate Index shows that the local business environment reached new highs in September driven by a strong rally on the NSX local index.
The IJG Business Climate Index climbed 4.1 basis points to 120.2 basis points extending its winning streak to four consecutive months, with all indices moving into positive territory.
The leading indicator was the biggest winner in September, gaining 6.4 basis points on the back of lower international fuel prices, strong commercial vehicle sales and a surging NSX local index.
International oil prices fell 11% during the month (although local pump prices moved in the opposite direction to compensate for under recovery on the fuel fund), while vehicle sales were up 6%. The NSX continued its impressive run, gaining a further 12 basis points in the process.
The investment index was not too far behind, increasing by 5.9 basis points, due to improved building and credit extension numbers. The number of buildings completed remained relatively weak although commercial mortgages grew by 31%. The consumption index was up 3.3 basis points as vehicle sales rose 10% and consumer credit extension numbers climbed 10%.
The export index was 2.9 basis points higher as exchange rates stabilised, while both metal and meat prices rebounded from last month’s declines. Beef prices enjoyed good uptake of weaners in the wake of limited supplies, pushing up overall beef prices 12%, while fish prices moved sideways.
Metal prices on the other hand were supported by a turnaround in the uranium price, which has been on a downward trajectory since the Fukushima nuclear accident in March.

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