Business climate remains positive
Latest data from the Institute of Public Policy Research, (IPPR) shows that the IJG Business Climate Index climbed by 1 basis point to reach 121.9 in November, extending its winning streak to six consecutive months in the process .
The export index was the biggest mover, overcoming its poor showing in October to rise by 3.5 basis points.
Metal prices were largely responsible for the upward trend, rising by 12% in November (or 18% in local currency terms). Red meat also fared well on the export market with beef and mutton prices climbing 3.5% and 5% respectively.
On the negative side, fish prices fell 6% as European debt concerns affected the market. To this end, European leading indicators fell for the sixth consecutive month and the business climates in many EU countries are not looking favourable.
The investment index moved sideways and remains relatively high while consumers were less confident in November as the consumption index shed 1.2 basis points due to higher international oil prices – the effects of which were mitigated by a stronger local currency. Consumer borrowing and passenger car sales remained flat although the annual inflation rate was steady at 6%.
Looking ahead, IPPR says given the metal future prices, vehicle sales and the rising NSX local index, the business climate is set to remain positive for the next six months. However, the December-January slowdown in Namibia is expected to create some downward pressure as businesses run down their inventories and there is a drop-off in credit extension for businesses and consumers over the holiday period.