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Business Climate Index decline not likely to affect trends

The IJG Business Climate Index (BCI) for November 2013 experienced a slight decline by 0.6 resulting in the overall index to stand at 147.0 points but due to the strong growth in the leading indicator it is suggested that the outlook for the first six months of 2014 is positive.
Even though there was a decline, the Institute for Public Policy Research revealed that it was not large enough to result in a change of the quarterly trends and this was supported by the continued increase in the three month moving average.

In the report the slight decline can be attributed to the fish, mineral and oil prices as well as reduction in the value of building plans caused the drop. The decline in building plans was a result of the season and was largely offset by increases in a number of other components.
Notably the increase in the vehicle sales contributed 21.6 points to the index because of the high commercial vehicle sales. The report also revealed that November alone the investment index expanded by 4.0 points and at the same time the consumption index grew by 1.4 index points.
The monitor also revealed that the support for the Investment Index’s expansion was largely as a result of corporate vehicle sales.
On the other hand, the consumption index was also driven by strong vehicle sales and credit extension, but in their case, to households rather than corporates. The export and leading Indices expanded by 1.3 and 2.6 points, respectively, in November, on account of vehicle sales, increased registration of businesses and strong growth in the overall index value of the Namibia Stock Exchange over the period.

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